Judgment of the Tribunal regarding the application by the Consumers’ Association, commonly known as “Which?”, for a collective proceedings order ("CPO") under s.47B of the Competition Act 1998 ("CA 1998") to combine standalone claims under s.47A CA 1998 alleging that the Respondent ("Qualcomm") has abused its dominant position in breach of the Chapter II prohibition in s.18 CA 1998 and, until 31 December 2020, Article 102 of the Treaty on the Functioning of the European Union in relation to the royalties charged by Qualcomm to smartphone manufacturers for the licensing of its patents for chipsets (the "CPO Application"). The standalone claims are for loss suffered by consumers in the form of more expensive and/or lower quality products, alleged to have been passed on to them by smartphone manufacturers who paid inflated royalties for the use of Qualcomm’s patents. Which? seeks a CPO on an opt-out basis for those in the class definition who are domiciled in the UK and on an opt-in basis for class members domiciled outside the UK.
Qualcomm resisted the CPO Application on the basis that the methodology proposed by one of Which?’s economic experts for quantifying pass-on to consumers is not fit for purpose and that, in any event, the proposed claims are not suitable to be brought in collective proceedings because the costs of the proceedings will outweigh the benefits. In addition to these objections, Qualcomm contended that if a CPO is granted, the Tribunal should require Which? to obtain an anti-avoidance endorsement ("AAE") to its after-the-event ("ATE") insurance policies in order for Which?’s funding arrangements to meet the requirements of s.47B(5)(a) CA 1998 and Rule 78(2) of the Tribunal Rules 2015.
For the reasons given in the Judgment, the Tribunal unanimously concluded that:
(1) Which? meets the authorisation condition.
(2) The claims sought to be combined meet the eligibility condition.
(3) A clause in Which’s? ATE policies should be amended but Which? is not required to add AAEs to its post-CPO ATE policies.
(4) A CPO will be made on an opt-out basis for those of the class domiciled in the UK and on an opt-in basis for class members domiciled outside the UK.
