The lawyers and funders of a collective action against Google have agreed to accept payments totaling £100m, some £34m less than they are entitled to, to help settle the claim. The Competition Appeal Tribunal (CAT) will next week be asked to approve the settlement of the case brought by class representative Professor Barry Rodger, a competition law academic.
The case alleges that Google used a variety of technical and contractual restrictions to ensure its Play Store is the only place where UK app developers can market or sell apps designed for Android devices.
Settlement Details
The total settlement of £260m, agreed without any admission of liability by Google, represents around a quarter of what the claim was originally said to be worth. The CAT will be told that, given there is a relatively small number of class members that have substantial claims, take-up of the £160m, at least by value, is expected to be “very high”.
Professor Rodger alleges that Google used a variety of technical and contractual restrictions to ensure its Play Store is the only place where UK app developers can market or sell apps designed for Android devices. In his witness statement, he said: “Whilst I remain confident in the class’s liability case, and consider that it has good prospects of success at trial, I recognise the inherent uncertainty as to the outcome and, in particular, as to the likely level of damages.”
This uncertainty is further complicated by the fact that the damages in this case sit on an unusually large spectrum, making it difficult to predict the outcome. The settlement sum was considered just and reasonable, taking into account the uncertainties and the potential risks of proceeding to trial.
Funding and Costs
Funder Bench Walk Partners’ capital outlay is £27.7m and it will receive a further £56.2m as its profit. This has been reduced from its entitlement to £82.8m under the terms of the litigation funding agreement. Professor Rodger said: “I was able to secure Bench Walk’s agreement that it would not insist on its contractual rights where doing so was likely to jeopardise the tribunal’s approval of the settlement or put me in a position where I could no longer act in the best interests of the class.”
The lawyers and funders have agreed to take a reduced payment to help settle the claim. Geradin Partners and counsel team led by Robert O’Donoghue KC will share the remaining £12m of the pot of money put aside for advisers, and have agreed to accept 32% less than they are due.
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The funding agreement was structured in a way that allowed for flexibility in case the settlement was not approved. Bench Walk Partners originally committed £16.5m to the case but was twice asked to increase its backing, demonstrating the complexity and risks involved in pursuing the claim.
Implications of the Settlement
The settlement is a significant development in the case, which was originally expected to go to trial. The CAT will consider the settlement and determine whether it is fair and reasonable. If approved, the settlement will bring an end to the collective action against Google.
The CAT will make its decision on the settlement in the coming weeks. If approved, the settlement will provide compensation to UK app developers who were affected by Google‘s practices.
Professor Rodger and his team are waiting for the CAT‘s decision.
The case is complex.
The complexity of the case is evident in the fact that it was case-managed with two other claims related to Google‘s Play Store conduct, highlighting the need for a full approach to addressing the issues at hand. The settlement is a result of careful consideration of the uncertainties and risks involved, and its approval will depend on the CAT‘s assessment of its fairness and reasonableness.