Justin Gutmann v Apple Inc & Ors

The Competition Appeal Tribunal has substantial latitude to manage collective proceedings, particularly where information is initially held by the defendant. That latitude does not excuse an unparticularised pleaded case. A claim that products breached warranty or statutory rights must identify the applicable standard and the primary facts said to establish breach.

Where a claimant advances a distinct case based on the likely commercial response to transparent disclosure, the Tribunal may permit it to proceed if further disclosure could realistically supply evidence and later particularisation is required. An announcement does not necessarily end an alleged abuse merely because its content is disclosed. Its form, timing and dissemination may also matter. Under the CAT Rules, suitability to represent a class turns on fair and adequate future conduct, not class membership or a pre-existing relationship with class members.

The proposed class representative brought opt-out collective proceedings on behalf of owners of certain iPhone models. He alleged that Apple abused a dominant position by failing transparently to disclose unexpected power-offs and by introducing a performance-management feature which could reduce performance.

The Competition Appeal Tribunal certified the proceedings, subject to funding, and refused Apple reverse summary judgment and strike-out relief: [2023] CAT 67. It considered that the pleaded case that the phones were legally substandard lacked adequate supporting facts, but allowed the proceedings to continue on an alternative case based on the likely commercial consequences of transparency. Apple sought permission to appeal on the treatment of those cases, the period after its December 2017 announcement, and the proposed representative’s authorisation.

1. Disposition. The court deferred its final decision on Ground 1 for 21 days, so that the proposed class representative could seek permission to amend the pleading. It refused permission to appeal on Grounds 2, 3 and 4.
2. Ground 1. Apple had a realistic prospect of showing that the CAT should have required the removal of the pleaded case that the iPhones breached warranties or statutory rights. That was a distinct, hard-edged allegation. It required identification of the relevant legal or technical standard and primary facts showing non-compliance. The CAT had found no such case, disclosure had been directed principally to the technical issue, and the representative no longer maintained the allegation as explained in argument. The CAT’s active case-management role required disciplined and concise pleading, while also protecting defendants from baseless and sprawling claims.
3. Ground 2. The alternative case did not depend on a legal defect or an enforceable consumer claim. It concerned the effect of the performance-management feature, likely consumer reaction had disclosure been transparent, and whether Apple would have offered redress under commercial pressure. Given the early information imbalance, incomplete disclosure about Apple’s response to complaints, and the CAT’s intended requirement for later particularisation, the CAT was entitled to conclude that further evidence might establish a proper evidential basis. Its evaluative case-management decision should not be disturbed.
4. Ground 3. Assuming an arguable non-transparent abuse, Apple bore the burden of showing that its effects necessarily ceased upon its announcement of 28 December 2017. The CAT was entitled to hold that the announcement’s content alone was not decisive. Its form, timing, dissemination and the class members’ understanding required evidence.
5. Ground 4. Under CAT Rules rule 78, a representative need not belong to the class. The controlling question is whether it is just and reasonable to authorise a person who will act fairly and adequately without a material conflict. There is no presumption against a special-purpose vehicle or an experienced representative who has brought other collective proceedings. The CAT’s assessment of Mr Gutmann’s suitability fell within its broad discretion.
6. Further matters. The court inclined to the broad reading of section 49(1A) of the Competition Act 1998, but left the jurisdiction issue unresolved because it was unnecessary. Concerns about confidentiality of the CMA consultation letter were to be addressed first by the CAT after submissions from appropriate participants, consistently with open justice.

• Court of Appeal (Civil Division). In this judgment, [2024] EWCA Civ 702, the court deferred a final decision on Apple’s permission application concerning Ground 1 and refused permission on Grounds 2 to 4.
• Competition Appeal Tribunal. In [2023] CAT 67, the CAT certified the collective proceedings subject to funding, refused reverse summary judgment and strike-out relief, and authorised Mr Gutmann as proposed class representative.
• Competition Appeal Tribunal. At the earlier certification hearing, [2023] CAT 35, the CAT declined certification of the claim as then formulated, ordered further information and disclosure, and adjourned reconsideration.