Representative Actions and Digital Markets

In Stichting Right to Consumer Justice and Stichting App Stores Claims v Apple (Case C-34/24), the Court of Justice of the European Union (“CJEU”) has recently considered how Article 7(2) of the Brussels I Recast Regulation applies, where alleged anticompetitive conduct on an online platform affects customers across an entire Member State and a remedy is pursued through a representative action.

Background

The proceedings came before the CJEU by way of a preliminary reference. They arose from representative actions in the Netherlands brought by two foundations authorised under national law to do so. The defendants were Apple Inc. and Apple Distribution International Ltd ("Apple").

The foundations alleged that Apple abused a dominant position by charging excessive commissions to app developers through the Dutch App Store, which were then passed on to customers as higher prices. They sought declarations of infringement and compensation for an identifiable but indeterminate group of users who bought digital content through the Dutch storefront.

The jurisdictional issue

Article 7(2) of Brussels I Recast allows a defendant to be sued in matters of tort in the courts of the "place where the harmful event occurred", being either where the damage arose or where the event giving rise to it occurred.

The referring Dutch court considered that the Netherlands had international jurisdiction to deal with the proceedings because most affected users were based there and paid via Dutch bank accounts. The difficulty was territorial jurisdiction within the Netherlands. The nature of the online platform made a place of purchase difficult to identify and traditional connecting factors, such as the customer's registered office, could fragment territorial jurisdiction across multiple courts in a collective action, risking inconsistent outcomes and inefficiency.

Additional questions arose because the proceedings were representative actions brought in the foundations' own names to protect collective interests, rather than assigned individual claims. It was unclear whether jurisdiction should be linked to the registered office of the foundations themselves.

Also, if multiple Dutch courts had jurisdiction, could separate actions initially brought before different courts, all be heard by just one court?

The Court's approach

The CJEU reiterated that under Article 7(2) of Brussels I Recast, the "place where the harmful event occurred" covered both the place where the damage occurred and the place of the event giving rise to that damage, and that this special jurisdiction must be interpreted independently and strictly.

In competition cases involving alleged abuse of dominance:

• the event giving rise to the damage consisted of the implementation of the abusive conduct; and
• the place where the damage occurred was the market affected by that conduct.

Article 7(2) of Brussels I Recast conferred both directly and immediately international and territorial jurisdiction on the courts for the place where the damage occurred.

However, the CJEU drew a distinction between direct damage, which could found jurisdiction, and subsequent or indirect consequences, which could not.

Online platforms and national markets

The Court then referred to its earlier ruling in the Volvo case. This was an action for compensation for damage caused by alleged collusive pricing arrangements within the affected market. In that case, international and territorial jurisdiction depended on where the claimant purchased goods or, if purchases occurred in several places, where its registered office was located.

However, it said that those criteria could not readily apply to digital purchases made online by indefinite numbers of unidentified users. The criteria needed to be adapted to preserve the effectiveness of Article 7(2) and the sound administration of justice.

The App Store NL was directed specifically at the Netherlands market. So, when determining the place where the damage occurred, the virtual space of the App Store NL, where the purchases were made, corresponded to the entire territory of that State. The damage suffered in that virtual space could therefore occur in that territory, irrespective of where the users were located at the time of the relevant purchase.

Representative actions

The CJEU then considered the fact that the current proceedings were representative actions.

It noted that rather than being the assignees of individual claims, the foundations acted in their own right as independent promoters of the collective interests of a strictly defined group of unidentified but identifiable users.

That user group should be determined in a sufficiently precise manner to enable interested persons to express their position on the outcome of the proceedings and, where applicable, to receive compensation.

However, for the purpose of determining territorial jurisdiction, the courts were not required to determine the exact place where each individual suffered loss since those victims were not identified individually at the time when that court ascertained whether it had jurisdiction; nor could it be required to identify one or some of those victims.

The fact that it was impossible to determine, for each alleged victim, the place where the damage occurred, did not mean that Article 7(2) of Brussels I Recast did not apply. Rather, the relevant place was a well-defined geographical area, namely the whole of the territory to which the market affected by the alleged anticompetitive conduct belonged.

Accordingly, any national court with substantive jurisdiction to hear such a representative action had jurisdiction to hear it in its entirety, based on the place where the damage occurred.

Centralisation and administration of justice

The CJEU went on to say that this approach supported the following objectives of Brussels I Recast:

• proximity - as courts in the affected market were equally connected to the dispute;
• predictability - since operators targeting a national market could foresee being sued there;
• sound administration of justice - by avoiding fragmented proceedings and inconsistent decisions.

The Court also recognised that the complexity of competition damages actions, particularly those involving digital platforms, was a factor favouring centralised handling of collective claims.

Article 7(2) therefore did not prevent national rules that concentrated related representative actions before a single court.

Outcome

In summary, the CJEU concluded that where alleged anticompetitive conduct on an online platform affected users within the market of a Member State, any court in that State with substantive jurisdiction to hear a representative action brought to defend the interests of those affected users had international and territorial jurisdiction over the entire claim based on the place where the damage occurred. It was unnecessary to consider alternative jurisdictional grounds or the effect of national centralisation rules.

Comment

This is a notable judgment showing the direction of travel of the CJEU around this still relatively new redress mechanism. Closer to home, May 2025 saw the first representative action launched before the Irish courts. However, in an Irish context, questions still remain around the funding of representative actions, given the restrictions on third party litigation funding in this jurisdiction.  The Law Reform Commission is due to report shortly on the area of litigation funding and that report is awaited with interest.

For more information please contact Ian Lavelle or Heather Mahon.