Rowntree v Performing Right Society Ltd & Anor

Factual and Procedural Background

The appeal concerns an order of the Competition Appeal Tribunal dated 27 August 2025 which (a) granted reverse summary judgment/struck out the claims and (b) refused to certify them as eligible for inclusion in collective proceedings. The Appellant is a songwriter member of Company A (a collective management organisation) and sought a collective proceedings order under section 47B of the Competition Act 1998 proposing himself as class representative for an opt-out class of songwriter members for the period from 9 March 2017 to the date of issue. Company A, through its wholly owned subsidiary Company B, licences musical works, collects royalties and distributes net income to its members under published rules and a Distribution Policy. The Appellant's claim challenged Company A and Company B's method of allocating royalties that could not be matched to identified members ("black box" or "unidentified" royalties), alleging the pro rata distribution between writers and publishers amounted to an abuse of dominance under Chapter II of the Competition Act 1998. The Tribunal struck out or dismissed the claims and refused certification; the Appellant appealed to the Court of Appeal. Judge Miles delivered the leading judgment, with Judges Zacaroli and Nugee agreeing.

Legal Issues Presented

1. Whether the Tribunal erred in law in concluding that the proposed class lacked the necessary common feature (being "owed" unidentified royalties) for certification under s.47B(6) of the Competition Act 1998.
2. Whether the Tribunal erred in law in concluding that Company A and Company B's pro rata distribution of unidentified royalties could not, as a matter of law or on the pleaded case, amount to an abuse of dominance by imposing unfair trading conditions contrary to Chapter II of the Competition Act 1998.

Arguments of the Parties

Appellant's Arguments

• The class as pleaded could have suffered aggregate loss (up to a claimed upper figure) and it was not necessary at certification to prove every class member had individually suffered loss; aggregate ("top-down") assessment could be refined at trial.
• The pleaded statistical premise (that unidentified royalties are likely disproportionately attributable to writers) supported an arguable claim of systematic unfairness in the distribution methodology; the claim should proceed to allow evidence and disclosure to test and to permit reformulation of a counterfactual distribution.
• The law on unfair trading conditions is developing and summary disposal at the certification stage was inappropriate where factual development and expert work might establish a viable counterfactual and quantify aggregate loss.

Respondents' Arguments (Company A and Company B)

• There is a mismatch between the proposed class (all songwriter members) and the subset of members who might actually have been owed unidentified royalties; the pleading fails to show commonality of being "owed" such sums.
• The Appellant advanced no plausible non-infringing counterfactual distribution against which to test the fairness of the pro rata rule; without a counterfactual the claim cannot show exploitative abuse.
• Pro rata distribution approximates a work-by-work distribution where matching is impossible; Company A and Company B have taken reasonable, proportionate steps to match royalties and the Distribution Committee considered cost-efficiency and accuracy. Alternative distributions (e.g. per capita) would disadvantage many writers; the case therefore lacks reasonable prospects.
• Practical and proportionality concerns (including litigation cost, funding arrangements and potential for the class to bear costs) weighed against certification; respondents relied also on a later Supreme Court authority in a respondents' notice as an additional basis to uphold the Tribunal's refusal.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court began by accepting that Company A and Company B were dominant and that their rules might affect trade; the core question was whether the pro rata allocation of unidentified royalties could amount to an exploitative abuse by imposing unfair trading conditions.

Key steps in the analysis were:

• The Court observed that unidentified ("black box") royalties arise from information deficits; the "true distribution" in a world of perfect data is unknowable and therefore cannot serve as a realistic comparator for assessing unfairness.
• The claimant must identify a plausible non-infringing counterfactual distribution against which the actual rule can be compared; the Appellant had advanced no such counterfactual in pleaded form nor a realistic candidate at the hearing (the only floated example—per capita distribution—would, on the Court's analysis, be worse for many writers).
• The proposed class (all songwriter members) did not, as pleaded, identify a common feature of being "owed" unidentified royalties; the Tribunal's finding that the class was not properly drawn was upheld as the Appellant failed to show commonality of entitlement.
• Statistical assertions that writers as a class are more likely to be affected by data failures do not convert probabilistic tendencies into enforceable individual entitlements; writers are heterogeneous (superstars vs. low-play writers) and probabilistic assertions do not demonstrate that the pro rata rule is inherently biased or unfair.
• Company A and Company B's distribution approach aims to replicate, as far as possible, work-by-work allocations; the Distribution Committee considered trade-offs between accuracy and cost; there was no criticism of the matching processes and no realistic prospect that litigation would produce the missing matching data needed to create a more accurate counterfactual.
• Given the absence of a credible counterfactual, the insufficiency of the aggregate damages methodology at the certification stage, and proportionality concerns, the pleaded claim did not exhibit reasonable prospects of establishing exploitative abuse under Chapter II.

Holding and Implications

APPEAL DISMISSED

Holding: The Court dismissed the Appellant's appeal, upholding the Tribunal's decisions to strike out/dismiss the claims and to refuse certification for collective proceedings.

Implications: The direct effect is that the Tribunal's rulings (strike-out/summary judgment and refusal to certify) stand; the Appellant's proposed collective claim challenging the pro rata distribution of unidentified royalties will not proceed. The Court did not identify or establish a new, general principle extending Chapter II liability in the circumstances of this case; the decision rests on the pleaded absence of a realistic counterfactual, lack of commonality in the proposed class and insufficient methodology for aggregate damages.