The substantive scope of the UK collective action regime

Since October 2015, it has been possible to file opt-out collective competition claims in the UK on a standalone basis. However, it was not until the UK Supreme Court’s December 2020 judgment in Merricks v MasterCard[1]  that the opt-out regime found its stride, with 16 claims having been certified by the Competition Appeal Tribunal (CAT) since.  Following years of delayed progress, the regime now clearly provides an important mechanism for the redress of harms occasioned by anti-competitive conduct. Through the lens of public and private competition enforcement in the fields of data protection, environmental protection, and labour markets, this article examines how the regime is developing into a vital tool for safeguarding consumer welfare.   

Background

October 2015 saw the entry into force of the Consumer Rights Act 2015. This introduced the modern UK collective action regime, by virtue of which authorised class representatives are able to bring collective actions on behalf of consumers and businesses, on an opt-out basis, in respect of losses resulting from a breach of competition law.[2]

In the UK Government’s 2012 consultation paper, that preceded the Consumer Rights Act 2015, the government noted that those harmed by anticompetitive behaviour are uniquely well-positioned to identify the resulting harms and would therefore complement the deterrent force of public competition enforcement: “consumers and businesses also have a fundamental right to seek redress for themselves for damages that they have suffered. In some circumstances, private actors may be better placed to know where anticompetitive behaviour is causing them harm and are best placed to weigh up the relative costs and rewards to them of pursuing an action.”[3] The consultation paper further noted that academic literature “suggests that victims of anti-competitive behaviour understand the infringement better due to specialised market awareness”.[4] This was reiterated by the UK government in its 2013 responsive report on the consultation.[5]

Accordingly, while opt-out collective proceedings must be based on an infringement of competition law, that basis provides a broad substantive scope for the regime to provide redress for harms suffered. The broad ambit of the competition regime is illustrated through public and private enforcement in the fields of data protection, environmental protection, and labour markets.

Competition law and data protection

The growth of the data-driven digital economy and zero-price markets has pushed to the forefront the question of privacy as a competition parameter. While this was initially a topic of consideration in merger investigations, such as in Google/ DoubleClick,[6] Facebook/WhatsApp,[7] and Microsoft/LinkedIn,[8] data protection was increasingly seen as an important subject for competition enforcement as competition authorities began to build up their understanding of digital markets and platform ecosystems.[9]    

In 2019, the Furman Review (a UK government commissioned report regarding competition in digital markets) noted that in a competitive zero-price market, consumers might be offered better privacy protections or even remuneration for use of their data. The Furman Review also emphasised that harm to privacy could be an indicator of lack of competition, and a method for incumbents to entrench their market power.[10]

Subsequently, in May 2021, the UK Competition and Markets Authority (CMA) and the Information Commissioner’s Office (ICO) issued a joint statement on competition and data protection in digital markets.[11] The statement highlighted the central role of personal data in the business models of companies providing online services. In particular, the statement recognised that (i) in a competitive environment, firms could compete for new customers on privacy offerings; and (ii) social media platforms with market power offering ‘take-it-or-leave-it’ terms on the use of personal data have the potential to distort competition and negatively impact consumer welfare.

In February 2024, the CAT certified Gormsen, an opt-out collective claim against Meta on behalf of Facebook users.[12] The claim alleges that Meta exploited its dominant position by forcing Facebook users to provide valuable and sensitive personal data on a take-it-or-leave-it basis in order to access its service; and that data collected by Meta on its users outside of Facebook (including sensitive medical information) was not necessary to the operation of Facebook’s service. In short, the claim alleges that Meta imposed (i) an unfair trading condition on users with regards to the take-it-or-leave it approach and (ii) an unfair price with regards to the off-Facebook data.  This vast data collection is alleged to have been economically valuable to Meta, as the company monetised it when charging advertisers.

When Meta appealed the certification judgment in Gormsen, the Court of Appeal noted that “[t]he use of data as a proxy for monetary payment is a rapidly increasing phenomenon of modern digital life and as such it is generating a range of new legal issues”. Meta sought to argue, in its first ground of appeal, that, while competition law was flexible, it still had to operate within the limits set by the United Brands test for unfair pricing. The Court of Appeal held, however, that “although the factual scenario might be relatively new, the framework for analysis is not. The CR’s case has a surface logic to it: if there was fair value passing between Meta and users in 2014 upon the basis of payment by way of on Facebook data alone, then the subsequent extraction of incremental high value data from users for no or no sufficient recompense might be unfair and attributable to the market power of Meta. It might amount to an abuse.” The Court of Appeal concluded that the CAT was entitled to see the Class Representative’s claim as arguable within the limits of United Brands and that “there is nothing in the approach being mooted by [the Class Representative] which is outwith normal methodologies”. [13]

Accordingly, the CAT and the Court of Appeal recognised that digital markets by their very nature raise novel concerns, which competition law principles and methodologies are sufficiently flexible to address.

Supporting the above position, the European Commission’s (EC) Revised Market Definition Notice emphasises that (especially in zero-price markets) the Commission may take into account non-price parameters considered relevant by consumers, including the privacy protection afforded by a particular product.[14]

Nor is this a view unique to EU and UK competition law. A senior official at the U.S. Department of Justice (DOJ) confirmed that privacy in digital markets is an aspect of competition with which the DOJ is concerned, the official noting that “the same traditional techniques that monopolists have used to stop competition, and rivals have used to agree or collude to block competition, can be applied to privacy.”[15]

It follows that there is now a broad recognition by competition regulators that data privacy is a vital competition parameter in digital markets, and UK courts have in turn recognised that the leveraging of a platform’s market power affecting the privacy of consumers may be an abuse of dominance for which the collective action regime may in principle provide redress.

Competition law and environmental protection

Over the past few years, competition and consumer rights authorities have bolstered their ability to combat greenwashing, which occurs where a business makes false or misleading environmental claims to the detriment of consumers who may be misled into purchasing products deceptively marketed as sustainable.[16] While greenwashing is now a conventionally-accepted form of consumer harm, competition law’s role in environmental protection has long been a central part of the broader debate concerning competition law’s wider public policy goals.[17]

Competition authorities in the UK and the EU have been clear in their ambitions. By way of example, in its 2022 advice to the Government[18] and in both its 2024/25[19] and 2025/26[20] annual plans, the CMA has highlighted the ways in which it intends to promote environmental sustainability. In addition to combatting greenwashing, these include ensuring “that markets for environmentally sustainable products develop in ways favourable to competition and consumers” and “that competition law is not an unnecessary barrier to companies pursuing environmental sustainability initiatives”.[21]

Both the EC and the CMA have identified environmental harm as an important parameter of competition, meaning that competition infringements affecting the environment harm consumers.  By way of example, in April 2025, the CMA published guidance on unfair commercial practices. In that guidance, the CMA set out types of information which may impact a consumer’s purchasing decision, which includes the environmental impact of a product. The CMA added that judging whether a particular commercial practice is considered unfair may be done by reference to how it affected the average member of a vulnerable group of consumers. Accordingly, it suggested that those concerned about the environment may be vulnerable and more susceptible to misleading environmental claims.[22]

Further, in view of a perceived lack of clarity over whether firms could collaborate in pursuit of sustainable aims, without being seen as engaging in a cartel, competition authorities in Europe and the UK have published various guidelines aimed at educating businesses.

In October 2023, the CMA published its Green Agreements Guidance.[23] While not legally binding, the guidance sets out principles that the CMA will consider when deciding whether to intervene, including with regards to agreements tackling climate change. Of particular note is the CMA’s statement in the guidance as to “the scale and urgency of the challenge to ensure environmental sustainability and particularly to combat climate change” which compels the CMA to (i) help businesses take action on climate change, without fear of breaching competition law[24] and (ii) recognise that innovation in environmental sustainability "is an increasingly important parameter of competition between businesses (as an aspect of the quality of the product or service provided)”.[25]

Sustainability is also recognised in the EC’s Revised Market Definition Notice as a parameter of competition driving customer choice.[26]

The potential to bring opt-out collective proceedings in respect of an abuse of dominance affecting the environment was considered by the CAT in Roberts v Thames Water & Ors.[27] In that case, the proposed class representative alleged that the defendant water companies had abused their dominant positions by providing misleading information to the water and sewerage regulator Ofwat in relation to pollution incidents. The under-reporting meant that the defendant water companies could then overcharge customers for sewerage services.

While the CAT rejected the claim on narrow statutory grounds, it also rejected the water companies’ argument that they would be exempt from competition law because they operated under a statutory monopoly with respect to residential customers. The CAT considered that this would contravene the promotion of consumer welfare and would be inequitable in circumstances where business customers (operating in a privatised market) would have a remedy under competition law.[28] Crucially, the CAT indicated that it would have reached a different conclusion if customers had been left without any prospect of compensation[29] and went on to confirm that, absent the express statutory exclusion, it would have certified the claims.[30]

Competition law authorities have thus embraced a responsibility to support sustainability goals, including by focusing on misleading environmental claims and their impact on consumers. Accordingly, breaches of environmental regulations may be characterised as abuses of a dominant position, and detrimental to consumer welfare. In such cases, the collective action regime may therefore provide an avenue for redress.

Competition law and labour markets

In recent years, competition regulators have considered the issue of monopsony in the market for labour, and the ability of such dominant employers to reduce workers’ wages or working conditions below competitive levels, or for the same to be accomplished by competitors colluding, for example, to fix wages.

In March 2025, the CMA issued an infringement decision to five companies engaged in the production and broadcasting of sports content, finding that the companies had exchanged competitively sensitive information in respect of rates of pay for freelance workers and that, in the majority of instances, the objective of those exchanges included coordination on pay.[31] Notably, the CMA found that these information exchanges were restriction of competition “by object”.[32] It was accordingly clear to the regulator that such infringements fell squarely within the substantive scope of competition law.

Militating against labour monopsony power being a proper subject for the application of competition law enforcement is the argument that such monopsony power may have limited impact on the price of the final service or product, and consumer welfare is accordingly not (materially) impacted. However, while the measure of damages may need to be assessed on a case-by-case basis, there is limited scope for disputing that this is a proper subject of competition law enforcement per se, given that both the CMA and the EC have determined that monopsony power negatively affects consumer welfare.

In its January 2024 report on competition and market power in UK labour markets,[33] the CMA noted that “when firms also have market power in product markets, employer market power not only harms workers, but may also harm consumers. To exercise employer market power and lower wages, firms reduce the amount of labour they demand. Because they now use fewer inputs, they also produce less, reducing output and increasing the prices consumers pay.”[34]

This was echoed by the EC in its May 2024 policy brief,[35] which noted that “[w]age-fixing firms maximize joint profits by setting wages equal to the monopsony wage level via a reduction of labour demand, with the side effect of reducing output and increasing downstream prices to the detriment of consumers.”[36] While this was written in the context of wage-fixing, the policy brief notes that “[t]hese findings can be generalized to any situation where the exertion of buyer power distorts labour demand and hence output.”[37]

Competition enforcement in the market for labour is therefore a generally accepted application of competition law, and such enforcement - whether through public enforcement by a regulator or private enforcement by way of the UK collective action regime - can serve to protect both workers, as suppliers of labour, as well as consumers.

Conclusion

It follows from the above discussion that competition law provides a broad scope to address abuses of dominance even in non-traditional or novel fields of enforcement, such as in respect of data privacy, environmental protection, and labour markets. Moreover, the enforcement of competition law in such areas is of a part with the traditional guiding principle of competition law and policy of safeguarding consumer welfare.

In the case of data protection, the novelty of the data-driven economy and the importance of personal data as an essential input for, and price of access to, the market is no bar to the application of established competition law principles and methodologies. Competition law may similarly provide an established logical basis for the analysis of actions by undertakings resulting in environmental harms, with regulators now recognising environmental concerns as a competition parameter. In respect of competition enforcement in labour markets, it is now accepted by both the EC and UK regulators that such enforcement protects both workers as well as consumers. Competition law principles may therefore operate to protect the rights of employees as well as safeguard consumers from downstream harms.

The broad ambit of competition law therefore provides an equally broad substantive scope for the collective action regime. It is therefore expected that new claims will be filed as new markets emerge and as consumers (and suppliers of labour) become aware of new ways in which they may have suffered loss as a result of anti-competitive conduct. This is because, as was noted in the UK Government’s 2012 consultation paper preceding the collective action regime, the victims of anti-competitive behaviour may be best placed to understand when and how infringements have caused them harm.[38]

By embracing these novel applications, including in respect of new markets and emergent harms, the regime underscores the dynamic nature of competition law in responding to contemporary challenges.