WAMCA case: SOMI v TikTok

At its core, this case comes down to the question of whether TikTok violates rules of privacy, telecommunications and consumer law by the way it operates the TikTok service and (thereby) insufficiently protects (mainly underage) users from harmful content. Previously, the Amsterdam District Court declared itself competent to take cognisance of these claims. Therefore, the second phase of these mass damage proceedings now takes centre stage: are the foundations admissible, what is the applicable law and can an exclusive representative already be appointed?

In the first interlocutory judgment, the court ruled that Stichting Onderzoek Marktinformatie was admissible as regards the claim for material damages. The admissibility of the other two claim foundations (Foundation Take Back Your Privacy and Foundation Mass Damage & Consumer) depends on whether they are willing to amend the agreement entered into with their litigation funder. In this regard, they must make it clear that control of the legal claim lies sufficiently with them, and not with the litigation funder. This they have now done and in January 2024, the court found all three foundations admissible.[1]

The claims of the claim foundations that deal with immaterial damages were declared inadmissible by the court because - according to the court - any claim for immaterial damages by each user depends so much on that user's individual situation that there is no bundleable (sufficiently similar) claim. This is an important consideration. If this decision stands and is followed by other courts, it may mean that it will become less attractive for litigation funders to finance privacy law cases now that an important potential damages item is removed. Given the limited financial interest, it will also be unlikely that aggrieved parties will litigate on their own to obtain immaterial damages. Therefore, does that mean that breaches will get away(er) easily? Can the Personal Data Authority take sufficient action against this?

In addition, in this interlocutory judgment, the court gives preliminary guidance on the compensation of litigation financiers. The court mentions that a stipulated compensation could possibly be excessive if it is assumed that a certain percentage of the compensation is applicable regardless of the amount of the damages awarded and regardless of the number of injured parties that can or do claim damages. That could mean in this case that the compensation for litigation funders could amount to tens of millions, which is excessive because it is not in reasonable proportion to the amount invested. The court therefore now assumes a maximum multiple of 5 of the amount invested by the litigation financier or the amount made available to the foundation, and considers it desirable to make this clear to the parties now. This is another important consideration: what falls under the amount invested or the amount made available to the foundation? Will litigation funders agree to this? If so, is it still attractive enough to fund a case?

Finally, there is as yet no experience of the situation where there are three interest groups, one or more of whom may be designated as exclusive advocates, and the non-designated advocates (possibly) remain litigants. The court also wants to clarify this in advance and outlines what it thinks the terms of any future approval of a settlement agreement might look like. The parties will still be given the opportunity to respond to this, but only once the case has reached that stage.

Now that all three foundations are admissible, the next step will be for the foundations and TikTok to be given the opportunity to negotiate a settlement and for interested parties to declare that they do not wish to participate in the collective action ('opt-out') or (for interested parties who were domiciled in the Netherlands on 9 November 2022 but now reside elsewhere) that they do wish to participate ('opt-in'). After the foundations have been given the opportunity to supplement the grounds of the collective action and TikTok has filed a statement of defence, the case will be heard on the merits.

In short, the court has already sought to clarify many points. The question is what the response of the claim foundations and their litigation funders will be to this.

What can Ploum do for injured parties, claim foundations and/or litigation funders?

We regularly work with companies, litigation funders and claim foundations in the field of mass claims and complex (international) proceedings. Want to know whether your case is eligible for funding? Sparring on what a funding agreement should look like? Or questions about the WAMCA or a complex procedure? Then contact Michel Jacobs and/or Suzanne Poutsma.