You Can’t Take Something For Nothing: Court Of Appeal Allows Class Representative To Pursue User Damages In Competition Claims

The Court of Appeal has rejected Meta’s challenge to Class Representative Dr Liza Lovdahl Gormsen’s amendment of her pleadings to include a claim for ‘user damages’. The question of whether such damages will be awarded will ultimately be decided by the Competition Appeal Tribunal at trial, but this decision in Meta Platforms Inc. & ors v Gormsen [2026] EWCA Civ 993 opens up another potential claim against tech companies for alleged misuse of consumer data. 

The Application

Dr Gormsen (the CR) has brought a claim against Meta in respect of its collection of personal data belonging to users of the social media platform Facebook between 14 February 2016 and 16 October 2023. The CR claims that Meta has abused a dominant position, giving users no choice but to agree to Facebook’s data policy on a “take-it-or-leave-it basis”, which allowed Meta to collect data about its customers from both its Meta platforms and third-party sites. Meta was allegedly then able to make a profit by selling this data. See our previous article for more information on the claim.

The CR initially pleaded damage to class members by Meta:

1. abusively overcharging Facebook users by requiring them to hand over their personal data as payment for use of the platform and/or
2. not fairly compensating Facebook users for the use of their data. In either case, the CR pleaded that it should be possible to identify a “fair” value for what the customers’ data would have been worth, had it been sold on a competitive market.

Meta’s position was that in the counterfactual it would not have made any monetary payment to users and therefore class members did not suffer any pecuniary loss. 

In response, the CR applied to amend her pleading to add an additional or alternative head of loss arising from interference with customers’ “valuable right to control the collection and/or use of their Off-Facebook Data [being the data collected from third-party sites]”. This would be a claim for so-called ‘user damages’, in which it is irrelevant whether Meta would in fact have negotiated with customers or paid for their data, because damage for the loss of the value of the exercise of that right would be calculated by modelling a purely hypothetical negotiation. Meta objected to the CR’s application to amend on the basis that a claim for user damages is not available in law for competition claims, being confined to proprietary torts only. 

The Tribunal granted the CR’s application. It found that this was not a pure question of law suitable to be refused at an interim stage, but rather should be considered with the full factual context at trial. The Tribunal also considered that the case law at least arguably supported the CR’s claim for user damages.

Meta appealed the Tribunal’s decision on the following bases.

1. The issue concerned a pure point of law divorced from any factual finding the Tribunal might make in due course.
2. The Tribunal was bound byprior case law holding that the list of cases where user damages is available is fixed and immutable, consisting only of proprietary torts where there was no material loss (including nuisance, trespass, detinue and breach of patent).
3. In any event, user damages were confined to cases where the law protects property rights (which competition law does not).
4. Further in any event, user damages were only available when the property had been wholly violated and so were not available where (as here) the claimant had consented to the use of property complained of.

The Court of Appeal’s decision

Meta’s appeal was dismissed. 

In the first place, the Court of Appeal found that it would be inappropriate to interfere with this “case management” decision of the Tribunal, which amounted to an “evaluative conclusion… about the way in which the facts might play out”. The Court of Appeal noted the extensive body of case law confirming that it is not appropriate to strike out issues of law “divorced from fact findings where the law might be uncertain and/or capable of development”. This was just such a case, and so the Tribunal’s stance was appropriate.

Notwithstanding that this was sufficient to determine the appeal, the judgment did also address the issues raised by Meta in relation to the law on user damages.

The Court of Appeal disagreed with Meta’s interpretation of previous Court of Appeal authorities, finding that these did not show that user damages were only available for a fixed list of torts (and by extension did not show that such damages are not available for competition law claims).

In this context, the Court of Appeal discussed the principles laid down by the Supreme Court in One Step v Morris-Garner [2018] UKSC 20 (One Step), the leading authority on user damages (referred to in that case as ‘negotiating damages’). One Step supports the proposition that user damages may be appropriate where a defendant has “taken something for nothing” such that the claimant should be compensated for the loss equivalent to the economic value of the right infringed, even if there would be no quantifiable damage under usual contractual damages principles. 

The Court of Appeal took from One Step that the theory behind user damages shows that they are a tool “to compute compensatory loss…where a valuable asset has been wrongly exploited by a defendant, in circumstances where conventional ‘but for’ damages would not result in adequate compensation”. 

The Court of Appeal also referred to Lord Leggatt’s (obiter) comments in Lloyd v Google [2021] UKSC 50 indicating that the law on user damages can evolve, and might apply to the wrongful appropriation of data.

In short, far from user damages being precluded for competition disputes by prior case law, the Court of Appeal held that the Tribunal was right to allow the question as to the availability of user damages in competition claims to go to trial. Indeed, it went so far as to comment that it is “at the very least strongly arguable that if user damages were needed to ensure that the purpose of section 18 [Competition Act 1998] was met, then a court or tribunal would have the power to make such an award”, and that “competition law is a prime candidate where a court or the [Tribunal] might consider that it should order such a remedy, if needs be, to ensure that an abuse was adequately and effectively redressed”.

Comment

The question of whether user damages will be awarded to class members as the hypothetical price for the alleged exploitation of their data will not be decided until trial, which is currently listed to start in October 2028. Nevertheless, this appellate court judgment provides a valuable insight into how the English courts might address this question, and more broadly arguments concerning alleged misuse of data.

The judgment is also interesting for its emphasis on the scope for the law on user damages to evolve, in particular into an area such as competition law which the Court of Appeal viewed as a “prime candidate” in this regard, in order to avoid “the statutory prohibition on abuse of a dominant position… risk[ing] being severely undermined in its ability in this new and vastly important world where data is rapidly becoming a proxy for money”.

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