Summary of Provided Opinion (Anonymized)

Factual and Procedural Background

Two applications for permission to appeal decisions of the Competition Appeal Tribunal (the "CAT") (Judge Roth, Judge Bankes and Judge Derbyshire) are at issue. The CAT made two collective proceedings orders ("CPOs") under s.47B of the Competition Act 1998. The defendants in both proceedings are companies in the Amazon group (hereinafter Company A). The claims seek aggregate damages for alleged abuse of dominant position contrary to the Chapter II prohibition in s.18 CA 1998 and (for the period prior to 31 December 2020) Art 102 TFEU, arising from practices relating to Company A's online store.

The first claim is a consumer class action, with the class representative referred to here as Plaintiff. The second claim is a claim on behalf of third-party sellers via Company A's online store, with its class representative also referred to as Plaintiff. Both CPOs were granted on an opt-out basis. Each claim involved an earlier carriage dispute; in the consumer claim the CAT preferred the appointment of the chosen class representative over an alternative applicant.

Legal Issues Presented

1. Whether the CAT erred in its approach at the certification stage to the suitability of the proposed class representative's litigation funding agreement (LFA) with a funder (Company B), specifically whether the CAT wrongly deferred scrutiny of the funder's return or otherwise misapplied authority when certifying the consumer class representative.
2. Whether the CAT erred in law in concluding that there was no actual or potential conflict of interest within the seller class represented in the second claim (i.e., between sellers using Company A's fulfilment network and those using their own delivery networks).

Arguments of the Parties

Appellant (Company A) — Consumer Claim (Funding)

• The CAT erred in its approach to the class representative's funding arrangements at certification: it applied a default rule (derived from Gutmann v Apple Inc) deferring consideration of the reasonableness of the funder's return until the end of proceedings unless there were exceptional circumstances.
• The potential return to the funder under the LFA was "wholly unreasonable" and "exorbitant"; the CAT should have declined certification on that basis.
• The CAT failed to take into account perverse incentives created by a high funder return affecting settlement decisions and failed to require the class representative to re-market for funding once carriage disputes were resolved.
• In the alternative, there are compelling public-policy issues about class action funding generally that warrant a Court of Appeal hearing (citing responses to a call for evidence from the Department for Business and Trade).

Class Representative (Plaintiff) — Consumer Claim (Funding)

• The CAT lawfully exercised a broad discretion under Rule 78 of the Competition Appeal Tribunal Rules 2015 in determining whether it was just and reasonable to appoint the class representative, and funding arrangements were only one factor in that evaluative judgment.
• The CAT recorded adequate ATE cover for adverse costs and addressed relevant LFA provisions (settlement, termination, control of legal costs, payment to the funder); the LFA expressly made any funder return subject to the CAT's order.
• Detailed assessment of the reasonableness of the funder's return is properly deferred to a later stage when privileged material and more probative information will be available.

Appellant (Company A) — Seller Claim (Conflict)

• There is an actual or potential conflict of interest within the class arising from allegations that use of Company A's fulfilment services (FBA) was favoured over sellers' own fulfilment (FBM): the class representative might prefer a higher diversion rate to maximise aggregate damages at the quantification stage, whereas certain subgroups (FBA sellers) would prefer a lower diversion rate at distribution to avoid being required to disgorge gains.
• The CAT should have found a disabling conflict and declined to certify the class or should have permitted an appeal to clarify the law on "direct" versus "indirect" conflicts.

Class Representative (Plaintiff) — Seller Claim (Conflict)

• The claimed conflict is not realistic because expert evidence (in particular the evidence of the class representative's expert) shows that the overcharge to FBA sellers on fulfilment fees is likely to be substantially greater than any profits gained from diverted sales, so FBA sellers would not be motivated to minimize diversion rates.
• The CAT appropriately assessed the evidence, relied on prior carriage-dispute findings, and concluded there was no realistic prospect of a disabling conflict; the CAT retains supervisory jurisdiction and may revisit the matter if evidence or positions change.

Table of Precedents Cited

Court's Reasoning and Analysis

The court approached each application by reference to the limited scope for interfering with the CAT's broad discretionary case-management decisions under Rule 78. Key analytical points were:

• Certification is a discretionary, evaluative judgment (Rule 78) that requires consideration of fairness, adequacy, conflicts of interest, ability to pay adverse costs and, where relevant, interim injunction undertakings. The CAT's conclusion on funding was one factor within that broad exercise.
• On the consumer claim, the CAT identified relevant LFA provisions to consider (settlement, termination, control of costs, payment to the funder). The CAT acknowledged the LFA could yield a potentially very high return but noted that the LFA expressly made any such return subject to CAT order and did not itself approve the funder's fee. The CAT deferred detailed assessment of the reasonableness of the funder's return to a later stage (judgment/settlement), citing authority and pragmatic limits at certification (e.g., privileged material, inability to access probative evidence then available).
• The court analysed Gutmann and concluded that the CAT did not misread Gutmann as imposing a rule that reasonableness must always be deferred; rather, Gutmann supports the proposition that the CAT has broad supervisory jurisdiction and that scrutiny at judgment/settlement is an appropriate and recognised option. Accordingly, the court found no arguable error of law or irrationality in the CAT's approach to the LFA at certification.
• The court rejected submissions that the CAT ignored incentive conflicts created by a high funder return, noting the CAT had specifically addressed how the LFA managed conflict points and that the potential for incentive problems did not amount to legal error in the certification decision.
• On the seller claim, the court analysed the conflict argument by reference to the pleaded abuses and the expert evidence. The CAT had found, on the evidence available (notably the expert's analysis), that the likely overcharge to FBA sellers outweighed diverted-sale profits and that there was no realistic prospect of a disabling conflict. The court concluded this was a permissible exercise of the CAT's discretion. It also noted the CAT retains supervisory jurisdiction to revisit potential conflicts and may adopt measures (e.g., separate teams/experts/funding) if issues develop.
• The court declined to treat policy responses or wider funding queries as compelling reasons to permit appeal from a case-management decision where no sufficiently arguable legal error was shown; broader policy debate was left to appropriate fora (e.g., the Department for Business and Trade process).

Holding and Implications

PERMISSION TO APPEAL REFUSED in both applications.

Implications:

• The CAT's CPOs remain in force and the appointed class representatives' certification stands.
• The court found no sufficiently arguable error of law or irrationality in the CAT's discretionary decisions concerning (a) deferral of detailed scrutiny of a funder's return until a later stage and (b) the absence of a realistic disabling conflict within the seller class on the evidence before the CAT.
• The decision has no effect of establishing new legal principles beyond affirming the CAT's broad supervisory discretion; the CAT retains power to scrutinise funder returns and to revisit conflict issues as proceedings develop. No new binding precedent was created by this refusal to grant permission to appeal.