User Damages as an Arguable Remedy for Section 18 Competition Act 1998 Abuses Involving Data

1. Introduction

In Meta Platforms Inc & Ors v Gormsen [2026] EWCA Civ 993, the Court of Appeal (Green LJ, Phillips LJ and Zacaroli LJ) dismissed an appeal from the Competition Appeal Tribunal ([2025] CAT 55) which had permitted the class representative (the “CR”) in opt-out collective proceedings to amend the pleadings to advance an alternative damages theory framed as “user damages”.

The proceedings—brought under section 47Bff Competition Act 1998—are pursued on behalf of a very large class (over 46 million Facebook users in the UK during the pleaded period). The pleaded competition law wrong is an alleged abuse of dominance contrary to section 18 Competition Act 1998, said to consist of “take-it-or-leave-it” terms requiring users to provide “Off-Facebook Data” without adequate value being transferred back to them.

The appeal did not determine whether the abuse occurred. It instead focused on remedy: whether it is at least arguable that, if an abuse is proved, damages may be assessed by reference to a hypothetical bargain (here, via a Nash bargaining model) to quantify the value of permission to use data—i.e., “user damages”.

2. Summary of the Judgment

  • Case management: The Court of Appeal held the CAT was entitled to refuse to decide a contested, developing point of remedial law in the abstract, divorced from trial findings on abuse and loss.
  • Arguability of user damages in competition law: The Court held it is at least strongly arguable that user damages are not confined to a fixed list of proprietary torts and may, in principle, be available to ensure effective redress for a section 18 CA 1998 abuse—particularly where the alleged exploitation concerns extraction and monetisation of valuable data.
  • Devenish and Wass: The Court rejected the contention that Devenish Nutrition v Sanofi-Aventis or Stoke-on-Trent City Council v W & J Wass Ltd definitively bar user damages in competition claims; it construed those cases as dealing with different remedies and contexts.
  • Modern authorities: Later appellate and Supreme Court guidance—especially Gulati v MGN Ltd, One Step v Morris-Garner, and Lloyd v Google—supports an evolutionary understanding of user damages as compensatory and potentially apt for wrongful appropriation/use of valuable information.

3. Analysis

3.1 Precedents Cited

(a) The modern framework: One Step v Morris-Garner

The judgment uses One Step v Morris-Garner [2018] UKSC 20, [2019] AC 649 (“One Step”) as the central explanatory authority on “user damages” (also termed “negotiating damages”). The key move in One Step—emphasised by Green LJ—is that user damages are:

  • compensatory (not primarily restitutionary),
  • triggered where the claimant has been deprived of the economic value of exercising a valuable right of control (treated as an “asset”),
  • often quantified by a hypothetical negotiation, which is a tool for valuation (not a free-standing, discretionary award),
  • justified by the idea that the defendant should not “take something for nothing”.

The Court of Appeal treats this analysis as undermining any rigid “proprietary torts only” rule and as supporting (at least arguability) for valuing wrongful extraction/use of economically valuable data.

(b) The alleged “closed list” argument: Stoke-on-Trent City Council v W & J Wass Ltd

Meta relied on Stoke-on-Trent City Council v W & J Wass Ltd [1988] 1 WLR 1406 (“Wass”) to argue that user damages are confined to a fixed set of proprietary torts (trespass, detinue, nuisance, patent infringement etc.).

Green LJ’s reading is the opposite: Wass is presented as a case about common law development, not categorical closure. He highlights passages in which:

  • Nourse LJ described the “user principle” as having developed “by accident rather than by design”, and contemplated whether further extensions should be made.
  • Nicholls LJ expressly acknowledged that common law adapts to social conditions, and rejected the claim on the particular statutory nature of market rights—not because user damages are doctrinally unavailable outside a closed list.

The Court therefore treats Wass as not standing for the hard-edged limitation on which Meta’s appeal depended.

(c) Competition damages and restitution: Devenish Nutrition v Sanofi-Aventis

Meta’s principal “binding authority” submission invoked Devenish Nutrition v Sanofi-Aventis [2007] EWHC 2394 (Ch); and [2008] EWCA Civ 1086; [2009] Ch 390 (“Devenish”), a cartel overcharge case. The Court of Appeal in Devenish refused a restitutionary account of profits where conventional compensatory damages were adequate.

Green LJ distinguishes Devenish on several levels:

  • User damages were not pleaded there; the remedy sought was an account of profits.
  • The legal and factual problem was different: concerns about complex quantification and pass-on, not the valuation of a “right of control” over an asset such as data.
  • It was common ground in Devenish that ordinary compensatory damages were adequate, so the court’s reasoning did not squarely address circumstances where (on the pleadings) conventional damages might be contested or said to be unavailable.

On the “binding ratio” point, Green LJ holds that Arden LJ’s judgment in Devenish should not be read as laying down a general rule that user damages are unavailable for competition law breaches. If (contrary to his reading) it did, he indicates there would be “real force” in the CR’s submission that such a conclusion would rest on a “manifest error” in the interpretation of Wass.

(d) Privacy and information as a valuable asset: Gulati v MGN Ltd and Lloyd v Google

The Court relies on Gulati v MGN Ltd [2015] EWCA Civ 1291 to show that damages may reflect the infringement of the right itself, including loss of control over information, and that this approach is not confined to classic proprietary torts.

It also draws support from Supreme Court observations in Lloyd v Google [2021] UKSC 50, where Lord Leggatt (with the Court concurring) described user damages as compensatory for interference with a commercially valuable right of control, and stated that misuse of internet browsing history would “naturally lend itself” to user damages (while holding such damages were not available under the specific statutory scheme of the DPA 1998). Green LJ extracts two themes:

  • the doctrine is capable of evolution to new forms of valuable “assets” (including data);
  • the law should not be “prissy” where the defendant’s purpose is to monetise wrongfully obtained information.

3.2 Legal Reasoning

(a) The Court’s primary ground: non-interference with CAT case management

The Court emphasises that appeals against the CAT’s procedural evaluative choices should rarely succeed. Here, the CAT concluded it was premature to “grasp the nettle” because:

  • the legal question is intertwined with factual findings at trial (including what constitutes adequate compensatory damages);
  • competition cases are expert-heavy and develop through disclosure, refinement, and expert “hot tubbing” (reinforced by CAT Practice Direction 3/25).

Green LJ reinforces this approach with authority discouraging summary determination of novel/developing issues on assumed facts, citing Begum v Maran [2021] EWCA Civ 326, Barrett v Enfield London BC, and Lungowe v Vedanta Resources PLC [2019] UKSC 20.

Importantly, the Court suggests that even if a Nash bargaining model features in proof of abuse, the “abuse” quantification may itself furnish the “but for” measure of loss (overcharge/underpayment), potentially making the user-damages route redundant or at least not determinative. This bolsters the view that deciding the point now would be premature and potentially artificial.

(b) The Court’s secondary ground: user damages are at least arguable under section 18 CA 1998

Although the appeal could be dismissed on case management alone, Green LJ engages the doctrinal argument and concludes that it is at least strongly arguable that:

  • user damages are not confined to a closed list of proprietary torts;
  • user damages can function as a valuation method for compensatory loss where a defendant has wrongfully taken the economic value of a right of control;
  • competition law, while not “specifically” about property, is broad enough that abuse may involve misuse or expropriation of valuable rights and assets (including data), and remedies should be capable of ensuring adequate and effective redress.

The judgment links this to the contemporary economic reality that data can operate as a proxy for money in multi-sided markets, so remedial doctrine must be able (at least arguably) to meet that reality, otherwise the section 18 prohibition risks being undermined.

(c) Consent and “take it or leave it” terms

Meta argued user damages require a total violation and are unavailable where the claimant consented to the use. The Court treats this as, at minimum, not a show-stopper on the pleadings because the alleged consent was procured by unfair and exploitative conduct constituting the very abuse complained of. It is at least arguable that such consent, if found unlawful under section 18, cannot negate compensation and may be treated as void or of no effect.

3.3 Impact

While the Court does not finally decide that user damages are recoverable for section 18 abuses, it establishes important practical and doctrinal signals:

  • Procedural: the CAT may permit pleadings that preserve alternative valuation routes (including user damages) where the law is developing and where trial findings may materially affect the legal analysis.
  • Substantive: defendants in data-driven dominance cases face an increased likelihood that tribunals will entertain (at least as arguable) damages models that value control over data and the “permission” price for its exploitation.
  • Precedential clarification: the judgment weakens attempts to treat Wass/Devenish as erecting categorical remedial bars in competition law and reframes them as context-specific.
  • Future litigation strategy: claimants may plead user-damages-style valuation as a fallback where defendants deny any real-world counterfactual in which users would have been paid, seeking to avoid “no damages because no payment market exists” defences.

4. Complex Concepts Simplified

User damages (or negotiating damages)
Damages assessed by asking: “What would a reasonable fee have been for permission to do what was wrongfully done?” They are compensatory where the loss is the economic value of a right of control, treated as a valuable asset.
Section 18 Competition Act 1998 (abuse of dominance)
A prohibition on dominant firms exploiting customers or excluding rivals, including by imposing unfair prices or trading conditions. In this case, the alleged “price” is the extraction of Off-Facebook Data without adequate value being returned.
Multi-sided platform and “payment in kind”
Services may be “free” in money terms but paid for through attention and data that is monetised with advertisers. The case frames personal data as consideration/value exchanged.
Nash bargaining model
An economic method for estimating how the surplus generated by an agreement would be split under a fair bargain, taking into account outside options and bargaining power—used here as a benchmark for valuing a hypothetical permission fee/value transfer.
“Arguable” vs “decided”
The Court held it is reasonably open to argue user damages may be available; it did not finally determine that they are available on the facts, which remain for trial.

5. Conclusion

[2026] EWCA Civ 993 is a significant appellate endorsement of (i) the CAT’s cautious, fact-sensitive approach to developing remedial questions in complex competition litigation, and (ii) the modern, compensatory understanding of user damages as a potentially flexible valuation tool, not confined to a closed category of proprietary torts. It clarifies that earlier competition damages authority—especially Devenish Nutrition v Sanofi-Aventis—should not be treated as foreclosing, as a matter of binding precedent, the availability of user-damages-style compensation where an abuse of dominance is alleged to have extracted and monetised valuable user data.