Which? Withdraws Part Of ICloud Claim Against Apple

Having survived strike-out at the Competition Appeal Tribunal (subject to a pending appeal to the Court of Appeal), Which? has withdrawn part of its claim against Apple because it had not obtained funding from its funder, LCM Funding UK Limited (LCM), and so was not able to defend the appeal. 

Background 

Which? brought a collective proceedings application against Apple (on an opt-out basis). The standalone claim alleges that Apple has abused a dominant position in respect of the operating systems for Apple mobile devices by unlawfully favouring its own cloud storage product, iCloud. 

The class members are iOS users falling into two categories:

1. customers who did pay for iCloud services in the claim period; and
2. customers who did not pay for iCloud services in the claim period. 

Decisions in the Competition Appeal Tribunal 

At first instance, the Tribunal:

• unanimously certified the claim as eligible to be brought as collective proceedings, and determined that it was just and reasonable for Which? to act as the class representative; and
• subsequently, and by a majority, dismissed Apple’s strike-out/summary judgment application.

Strike-out/ summary judgment 

The strike-out/summary judgment application concerned the claim made on behalf of class members who did not pay for iCloud services in the claim period (referred to in the judgment as Non-Purchasing Customers).

Which? contended that Non-Purchasing Customers had a “willingness to pay” for the iCloud services at a price that was lower than the allegedly abusive price but higher than the alleged counterfactual price. Which? said that the Non-Purchasing Customers therefore suffered a loss which was the difference between the counterfactual price and the “willingness to pay” price. This was referred to as the “forgone consumer surplus”.

The majority of the Tribunal found forgone consumer surplus was a pecuniary (monetary) loss which can be claimed as damages. The basis for this was as follows. 

• While Non-Purchasing Customers cannot come to court with unevidenced statements about their willingness to pay, to evidence the loss alleged to have been suffered by them, Which? could calculate damages by reference to a “top-down methodology based on willingness to pay”, which is permitted in collective proceedings. 
• There are two different routes to deriving a measure of aggregate pecuniary liability in collective proceedings:
  • the first involved aggregating valid but anonymous claims by reference to an evidence-based market demand curve; and
    • the second involved establishing the “gist” for the collective cause of action, which (in this case) is that consumers have been excluded from a market by an excessive price. Whilst the Non-Purchasing Customers cannot make individual claims, they can still proceed on a collective basis, given the majority’s interpretation of the Supreme Court judgments in Merricks v Mastercard and Evans v Barclays that not only damages but also liability can be proved on an aggregate basis.
• Alternatively, the majority found that a claim based on non-pecuniary loss was arguable. It was a novel point of law which ought to be allowed to trial so that it could be considered in light of the evidence.

Mr Justice Waksman provided a dissenting judgment. His view was as follows.

• On pecuniary loss, however measured, the foundation for Which?’s claim remains each individual consumer’s assessment of the value to them of the product. Waksman J noted that the starting point under the law of damages was to use objective rather than subjective calculations of loss. The demand curve posited by the majority may be an objectively assessed collection of various data points – but the nature of the data is still referable to each individual consumer’s subjective willingness to pay. Compared to the counterfactual, the Non-Purchasing Customers lost the ability to pay (indicatively) £5 for a service that had a market value of £5 – it is only once their subjective assessment is taken into account (i.e. that they might have valued the service at above the market price) that they can be said to have lost out. S.47C(2) Competition Act 1998, which allows damages to be assessed on an aggregate basis, does not mean that, if a claim made on an individual basis would fail because it relies on such a subjective assessment, it can somehow surmount this obstacle because the claims have been aggregated. 
• On non-pecuniary loss, the assessment of damages must still be objective, and the law of damages does not say that a court is entitled to award whatever it thinks appropriate in order to do justice.

Certification 

Aside from the strike-out/summary judgment application, the main issue at certification related to Which?’s funding arrangements. The funder’s parent company had published an annual report which reported a material uncertainty in relation to its going concern status. 

Apple unsuccessfully argued that:

• Which? had not considered the funder’s ability to fund the proceedings with sufficient care or due diligence, which cast doubt on Which?’s ability to fairly and adequately act in the interests of the class members; and
• the financial position of the funder affected Which?’s ability to fund the proceedings and discharge any adverse costs orders.

The Tribunal found that, on the evidence, Which? did carefully review the funding arrangements with sufficient care and due diligence and that the present financial position of LCM did not mean that it would not be just or reasonable for Which? to act as the class representative. The Tribunal noted that at the certification stage, it is not necessary to evidence sufficient funding all the way up to trial. 

The Tribunal therefore certified the claim. 

Withdrawal of the claim in respect of Non-Purchasing Customers

Following the above decision, the Tribunal gave permission to appeal the strike-out/summary judgment decision. However, pending the appeal, Which? informed the Court of Appeal that it was not in a position to defend the appeal, and therefore would withdraw its claim in respect of the Non-Purchasing Customers. The reason for this was that Which? had not obtained funding to defend the appeal.

Which? has subsequently informed the Tribunal that it has given notice to the funder terminating the funding agreement due to LCM having committed a breach that was not capable of being remedied. The collective proceedings have been stayed until 16 November 2026 whilst Which? seeks further funding and ATE insurance. 

Comment

For a claim to be certified, the proposed class representative must show that it would be able to act fairly and adequately in the interests of the class members and, as part of this, how it intends to fund its own costs of the proceedings. Notwithstanding the concerns as to LCM’s financial position, in addition to this claim, the Tribunal has certified other claims with LCM as funder (see, for example, Gutmann v Vodafone [2025] CAT 77 and Dr Maria Luisa Stasi v Microsoft Corporation and ors [2026] CAT 34). In conjunction with this development in Which? v Apple, the Australian parent company of LCM has commented that its “existing portfolio of case investments will be managed to conclusion, no new investments will be made”, and so it will be interesting to see what, if anything, happens to these other claims as a result. 

Further, as mentioned above, the Tribunal has previously considered that it does not need to be satisfied (at the certification stage) that a proposed class representative has secured sufficient funding to cover its costs to trial. In light of the developments in this case, it remains to be seen whether the Tribunal will re-consider that approach in future CPO applications. 

Given that the appeal will not be going ahead, it remains the law that claiming damages in the form of forgone consumer surplus is arguable, subject to the wider circumstances. However, given that the decision in the Tribunal was split (with a dissenting judgment from Mr Justice Waksman) and permission to appeal was granted, it remains to be seen whether claimants in future competition claims will seek to include forgone consumer surplus as a head of loss (and, if so, whether such attempts will succeed). 

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