Crypto Class Action Update - Submissions for Hearing on Leave to Se...

My Crypto Class Action submissions continued from previous post.

Please vote for my Hive witness. (KeyChain or HiveSigner)

Witness Vote using direct Hivesigner

Section 45(1)(b) Claim

Section 45(1)(b) of the Act states that "[a] corporation must not
give effect to a provision of a contract ... if that provision has
the purpose, or would likely have the effect, of substantially
lessening competition".
Section 45(3) of the Act provides that "competition" means
competition in any market which a party to the contract (or their
related body corporate) supplies or acquires goods or services (or
would be likely to).
Section 45(4) of the Act provides that the other provisions of the
contract and the provisions of any other contract to which a
corporation and its related bodies corporate are a party are to be
considered together with the primary provision to determine an
effect of substantially lessening competition.
Section 4 of the Act provides that "competition" includes
competition from imported goods and from services that are
"rendered or are capable of being rendered in Australia by persons
not resident or not carrying on business in Australia."
Section 4E of the Act provides that "market" means a market in
Australia and includes a market for goods and services which are
substitutable or otherwise competitive with each other.
Section 4G of the Act provides that "lessening of competition"
includes "preventing or hindering competition."

Markets

While there are many cryptocurrency related markets, for the
purposes of this interlocutory application, the Applicant focusses
on the market(s) in Australia for buying and selling
cryptocurrencies themselves.
"The authorities confirm that a market, within the meaning of the
[Act], is a notional facility which accommodates rivalrous
behavior involving sellers and buyers" and should "be understood
in the sense of an area of potential close competition in particular
goods and/or services and their substitutes."^[1]
"[T]he market is the area of actual and potential, and not purely
theoretical, interaction between producers and consumers where given
the right incentive ... substitution will occur. That is to say,
either producers will produce another similar product or consumers
will purchase an alternative but similar product."^[2]
The actual electronic trading market established by each
Cryptocurrency Exchange [SoC 342] for the buying and selling of
cryptocurrencies such as BTC and ETH is clearly a market within the
above definition. In particular the electronic trading market for
cryptocurrencies run by BTC Markets [SoC 272], an Australian
Cryptocurrency Exchange used by the Applicant, is such a market.
(CCB pp 117-118).
Substitutability of both demand and supply is the touchstone when
establishing market boundaries. Consideration of the particular
characteristics of the product in question is essential in
establishing whether there is sufficient substitutability for
products to be considered in close competition.^[3]
Case law has recognised narrow single-product markets where products
have unique characteristics which mean that few consumers or
producers of that product will change to an alternative product in
response to a small price change.^[4]
Cryptocurrencies and their consumption and production are completely
unique and distinct from any other product.
The production mechanisms for cryptocurrencies are completely
different from other assets. For BTC, ETH and other Proof of Work
(PoW) cryptocurrencies, production involves large capital
investments in specialized computer equipment and expenditure on
electricity (CCB pp 116-117, 217-218). No other type of asset is
produced in this way.
From a consumer perspective cryptocurrency has a number of unique
attributes including:
1. being native electronic money which gives you the ability to be
  your own bank - you can hold, manage and transfer the asset
  yourself with no need for intermediaries (the need to trust a
  third party and accept counter-party risk are eliminated) (CCB
  p215);
2. much faster, and generally much cheaper, global transferability
  than any other asset type - see 12 July Affidavit [14] (CCB
  pp271 - 272);
3. supply increases in a fixed, predictable, manner which is
  integral to the blockchain software code - supply increases for
  other asset classes are much less predictable (CCB
  pp221-222);
4. the ability of anyone with some technical skills to create their
  own programmable money (eg Ethereum smart contracts) (CCB
  pp209-213, 226).
For the above reasons cryptocurrencies are not substitutable in
close competition with traditional asset or money forms and thus
form a distinct market from other assets types.
It may also be the case that certain individual cryptocurrencies
such as BTC and ETH may be single product markets like those for
bananas and each major sport.
BTC, as by far the most well established and highest market
capitalization cryptocurrency occupies a unique position. ETH, being
the most well established and highest market capitalization
cryptocurrency that provides a smart contracts platform also
occupies a unique position. See 12 July Affidavit (Annex G) (CCB
p309).
For the purposes of the s45 Claims the Applicant submits that it has
established, on a prima facie basis, that there are markets in
Australia for each of BTC and ETH and for cryptocurrencies generally
and that these markets also extend outside Australia.

A party supplies or acquires in relevant market

Section 45(3) of the Act provides that competition means competition
in any market in which a corporation that is a party to the contract
or a related body corporate supplies or acquires goods or services
(or is likely to).
The Ad Ban Provisions are in each of the Respondents' Standard
Contracts with all of their advertising customers.
The following evidence allows inferences to be drawn that many
corporate holders of cryptocurrencies, especially those with
cryptocurrency related projects which they wished to advertise to
potential customers and/or investors, had advertised on the
Respondents' platforms prior to the Ad Ban and thus were party to
the Respondents' Standard Contracts:
1. the fact that 71% of all online advertising spend in Australia
  goes to the Respondents (CCB p173) means that any online
  project wanting to advertise, including those in the
  cryptocurrency space, are likely advertise with the Respondents
  at some point;
2. the Banfield Campaign of advertising Steem on the Respondents'
  platforms (CCB pp121-122);
3. Facebook's announcement of its Ad Ban implies that
  cryptocurrencies were being advertised on the Respondents'
  platforms, indeed Facebook included, in its examples of banned
  advertisements, an ad for BTC (CCB p60);
4. the examples of cryptocurrency related advertising being blocked
  (at CCB pp202-203).
By definition a corporation who holds BTC, ETH or another
cryptocurrency has acquired it in a relevant market (on a
Cryptocurrency Exchange, by private transfer or by mining it) and
is likely, at some point, to sell some part of the holding in a
relevant market.
Equally, cryptocurrency projects, by their very nature, involve at
least some supply or acquisition of cryptocurrency, especially BTC
and ETH. In particular, many cryptocurrency projects conducted
Initial Coin Offerings (ICO) using the Ethereum blockchain and
received investment in ETH. See (CCB pp209 - 213).
Thus large numbers of corporations who were party to the
Respondents' Standard Contracts supplied or acquired cryptocurrency
in relevant markets or were likely to.
Equally inferences can be drawn from the following evidence that
Facebook supplied or acquired Listed cryptocurrencies in relevant
markets or was likely to:
1. Facebook's Libra project:
  1. will have involved Facebook acquiring cryptocurrencies in
    order to gain the necessary experience to create their own
    cryptocurrency; and
  2. means it is likely that Facebook would both supply its own
    cryptocurrency (Libra) as well as needing to convert Libra
    into BTC, ETH and other cryptocurrencies as part of its
    consumer offering. (CCB pp295 - 306).
2. Mark Zuckerberg's statement regarding cryptocurrency in January
  2018 demonstrated a substantial understanding of cryptocurrency
  that is unlikely to have been gained without any practical
  experience of holding it. (CCB p294).
Inferences can be drawn from the evidence that Google's position in
the technology industry is so preeminent and its number of
interests and related bodies corporate so numerous and involved in
so many aspects of technology (CCB pp6 - 7, 155-156) that it is
likely that it or a related body corporate has acquired at least
some small amounts of cryptocurrency (particularly BTC & ETH).
Furthermore, two major recent developments make it likely that both
the Respondents themselves and many more corporations which are
their advertising customers will be acquiring BTC and ETH in
relevant markets in the near future:
1. the trend of major corporations such as Tesla and MicroStrategy
  acquiring BTC and ETH as part of their corporate treasury
  reserves (CCB pp310 - 312).
2. the recent passing of El Salvador's Bitcoin Law, which makes
  BTC legal tender and states that "every economic agent must
  accept bitcoin as payment when offered to him by whoever
  acquires a good or service." - this means that Facebook,
  Google and other corporations which are their advertising
  customers will have to accept (and thus acquire) BTC if they
  wish to do business in that country (CCB pp313 - 316).

Likely effect of substantial lessening of competition

For the purposes of this interlocutory application, the Applicant
relies on two matters already in evidence to establish a prima
facie case that the Respondents' giving effect to the Ad Ban
Provisions likely had the effect of substantial lessening of
competition in markets for cryptocurrencies:
1. the direct impact on rivalry between firms of preventing
  cryptocurrency related advertising on the Respondents'
  platforms; and
2. the dramatic falls in trading volumes on Cryptocurrency
  Exchanges after the Respondents gave effect to their Ad Ban
  Provisions.

Advertising - a crucial part of the competitive process

Advertising is an important dimension of the rivalry between
firms.^[5]
Competition is a process^[6] and advertising is a crucial part of
that process.
"But in identifying the existence of competition in particular
industries or markets, we must focus upon its economic role as a
device for controlling the disposition of society's
resources. Thus we think of competition as a mechanism for
discovery of market information and for enforcement of business
decisions in the light of this information."^[7]
Discovery of market information is at the heart of the competitive
process and advertising by market participants is a crucial means
by which that market information is conveyed from supplier to
potential purchaser.
Indeed, it is via the mechanism of advertising that much of the
real world competition between firms plays out. Whether firms
compete on price or features or both, the primary method by which
the competitive features of a firm's product are communicated to
potential purchasers is through advertising. This is especially
true in the online world.
A bricks and mortar store may convey its price and feature
offerings without the need for third party advertising by
passers-by seeing the store's offerings and signage and asking
questions of the store staff. A factory may have sales people that
visit potential customers premises to convey information on the
price and features of the factory's products.
But in the online world, all of these market information discovery
mechanisms occur primarily via the Respondents' platforms. Whether
paid advertising, organic advertising, or even attempts by a
potential customer to conduct their own online research, the
Respondents' platforms provide the gateway for the discovery of
market information.
When this gateway is substantially blocked for most of the firms in
a market the likely, indeed inevitable, effect is that the process
of competition is hindered. Substantially hindering the process of
competition is, by the definition in s4G of the Act, a substantial
lessening of competition.
Section 45(4) has the effect of aggregating together all of the Ad
Ban Provisions in all of the Respondents' Standard
Contracts (as well as the contracts of the Other Cartel Members
[SoC 314]) for the purposes of determining their effect on
competition.
As the Respondents' platforms represented such a large share of the
total advertising opportunities available to firms wishing to
advertise cryptocurrency and related products, the effect of the
elimination of those advertising opportunities was a substantial
lessening of competition in markets for cryptocurrencies.
According to the ACCC Report:
1. almost 50% of all time spent online by Australians was on the
  Respondents' platforms. (CCB p153);
2. 67% of the Australian unique audience for online advertising in
  February 2019 was on the Respondents platforms (CCB p165);
3. 71% of spending on online advertising in Australia goes to the
  Respondents; (CCB p173);
4. Respondents have captured 80% of all growth in online
  advertising over the 2016 - 2019 period. (CCB p173).
The following hypothetical examples are illustrative of the
hindering of the discovery of market information effected by the Ad
Ban Provisions:
1. If an Australian person or company was considering acquiring
  cryptocurrency, they would not be exposed, on the online
  platforms they most often frequented, to:
  1. advertisements for Cryptocurrency Exchanges, specialised
    cryptocurrency mining equipment or blockchain social
    networks like Hive (where it can be earned) in order to
    acquire cryptocurrency;
  2. advertisements for software or hardware wallets to hold
    that cryptocurrency once they had acquired it^[8];
  3. advertisements for cryptocurrency events and educational
    material regarding cryptocurrencies to enable them to
    understand them^[9];
  4. advertisements for legal and accounting advice to enable
    them to comply with the law in relation to
    cryptocurrency^[10].
The magnitude of the Respondents' position in online advertising
means that the Respondents giving effect to to their Ad Ban
Provisions (which has already been established) had the likely
(indeed inevitable) effect substantial lessening of competition
because it hindered the process of competition across entire
cryptocurrency markets.

Trading Volume Declines

The trading volume for a cryptocurrency represents the aggregate of
very large numbers of transactions by traders - competitors buying
and selling that cryptocurrency - on that Cryptocurrency Exchange.
Trading volumes shown in the charts at Annexes J & K of the 12 July
Affidavit (CCB pp317 - 320) are measured in the cryptocurrency
concerned (ie BTC, ETH) not in AUD or USD terms and thus exclude
price variation.
For BTC traded on BTC Markets, weekly volume dropped from:
1. 6666 BTC for the week ending 28 Jan 2018, before Facebook's Ad
  Ban to;
2. 3193 BTC for the week ending 25 Feb 2018, 4 weeks later;
3. 2276 BTC for the week ending 8 April 2018, 10 weeks later; and
4. 1176 BTC for the week ending 29 July 2018 after Google had
  implemented their Ad Ban.
5. and continued at these levels of less than 25% of pre-ban
  volume until early November 2018.
For ETH traded on BTC Markets, weekly volume dropped from:
1. 62,580 ETH for the week ending 28 Jan 2018, before Facebook's
  Ad Ban to;
2. 9,122 ETH for the week ending 25 Feb 2018, 4 weeks later;
3. 17,788 ETH for the week ending 8 April 2018, 10 weeks later;
  and
4. 7962 ETH for the week ending 29 July 2018 after Google had
  implemented their Ad Ban.
5. and continued at these levels of less than 25% of pre-ban
  volume until early November 2018.
Thus in a very direct sense, these dramatic drops in the volume of
trades in these markets represent a substantial lessening of
competition in these markets, the essence of competition being
rivalrous market behavior. Fewer trades means less rivalry and when
that reduction is of the magnitude demonstrated by the evidence it
is a substantial lessening of competition.

Section 45(1)(c) Claim

Section 45(1)(c) of the Act states that "[a] corporation must
not engage with one or more persons in a concerted practice that
has the purpose, or would likely have the effect, of substantially
lessening competition".
A concerted practice is: "any form of cooperation between two or
more firms (or people) or conduct that would be likely to establish
such cooperation, where this conduct substitutes, or would be
likely to substitute, cooperation in place of the uncertainty of
competition."^[11]
The conduct of Facebook and Google in announcing their Ad Bans, in
similar terms, within weeks of each other and then adjusting the
terms of their bans in similar ways over an extended period is a
concerted practice.
Not only did Facebook publicly communicate its ban to Google who
followed it, but Mark Zuckerberg, the CEO and controlling
shareholder of Facebook, has publicly admitted, under oath before
the US Senate, that Facebook and Google employees communicate with
each other about who to ban from their platforms. It also appears
that there are specialized systems within Facebook for enabling
such communications. See Annex P to 10 Dec Affidavit (video file).
By incorporating the Ad Ban in their policies which formed part of
their Standard Contracts, including with each other, each
Respondent created reciprocal commitments to the concerted
practice.
Cooperating with a competitor regarding decisions as to whom the
business does and does not sell its products is a type of
anti-competitive concerted practice listed by the ACCC in their
Guidelines on Concerted Practices^[12].
That the Respondent's conduct, in this case their concerted
practice of Ad Bans, had the effect of substantially lessening
completion in relevant markets has been established above.

Grounds for Relief

The Applicant relies on three grounds for relief for the purpose of
establishing prima facie contraventions of the Act:
1. Damages under s82;
2. Injunction under s80; and
3. Declaration under s163A.

Causation and Damages

Facebook and Google advertising works - it creates substantial
economic benefit for advertisers that exceeds its cost. The
Respondents would not have trillion dollar businesses (almost
entirely dependent on advertising revenue) if it did not. Preventing
an entire industry from advertising removes that substantial
economic benefit and thus necessarily causes damage in a variety of
different ways.
Damage to the Applicant and Group Members occurred by the
Respondents' contravening conduct via legal causation mechanisms
including:
1. loss of business profits and earnings;
2. wasted expenses and capital investments becoming worthless;
3. loss of business opportunity^[13];
4. losses due to depressed cryptocurrency prices (ie market based
  causation^[14]);
5. loss of amenity for users of blockchain based social media
  platforms.
"Section 82 is the vehicle for the recovery of loss or damage for
multifarious forms of contravention of the provisions of Pts IV and
V of the Act. It is important that rules laid down by the courts to
govern entitlement to damages under s 82 are not unduly rigid, since
the ambit of activities that may cause contraventions of the diverse
provisions of Pts IV and V is large and the circumstances in which
damage therefrom may arise will vary considerably from case to
case."^[15]
The Applicant's personal claim can be a vehicle for determining some
common questions regarding causation and damages, but other such
questions common to sub-groups will require directions under s 33Q
of the FCA at an appropriate time.
Aggravated damages, being compensatory in nature, are available
under s 82 of the Act while exemplary damages are available in
tort^[16], including the tort of deceit.^[17]
Advertising on the Respondents' platforms is highly effective and
creates economic benefit for advertisers that exceeds its cost.
See:
1. FB Report pages 30 - 31 (CCB pp14 - 15): "marketers will
  not continue to do business with us ... if we do not deliver
  ads ... [that] generate a competitive return in relation to
  other alternatives";
2. FB Report page 63 (CCB p19): "millions of business
  []rely on our services to grow and create jobs";
3. GG Report page 135 (CCB p32): "Our advertising solutions
  help millions of companies grow their businesses ...";
4. GG Report page 138 (CCB p35): "These partners may not
  continue to do business with us if we do not create more value
  (such as increased numbers of users or customers, new sales
  leads, increased brand awareness, or more effective
  monetization) than available alternatives."
Conversely, loss of the ability to advertise causes economic loss
in a variety of ways.
The Applicant suffered damages by the Respondents' contravening
conduct by a number of causation mechanisms including:
1. via market based causation, by losses on the sale of ETH;
2. via loss of business opportunity, by being unable to advertise
  his cryptocurrency advisory business;
3. via loss of amenity and income, by the Steem / Hive social &
  content blockchains ceasing to grow in number of users and
  levels of activity at the rapid pace they had before the Ad
  Bans.

Market Based Causation

Advertising creates economic benefit by stimulating demand. Indeed,
as discussed earlier, its function is to convey market information
to potential purchasers and thus increase the likelihood that
purchaser will chose the product of the firm conducting the
advertising.
Cryptocurrency prices respond to supply and demand according to
basic economic principles: lower demand leads to lower prices given
unchanged supply. See 1 Mar Affidavit [43 - [51] (CCB pp211 -
212).
Facebook, Google and Twitter's announcements of their Ad Bans and
Facebook's substantial relaxation of its Ad Ban in May 2019 are
each temporally correlated to large statistically significant
changes in the price of cryptocurrencies including ETH. See 1 Mar
Affidavit [7 -23] (CCB pp206 - 207) and Annex C charts
(pages 55 -57) (CCB p228 - 230).
Prices and volumes of ETH traded on BTC Markets dropped very
substantially from the pre-contravention period to the period after
full implementation of the Ad Bans.
ICOs were a very substantial source of fundamental demand for ETH;
and of reduction of supply of ETH on Cryptocurrency Exchanges in
the pre-contravention period.
The ETH price is strongly correlated to the value of Ethereum smart
contracts locking up large amounts of ETH, as occurred in the
pre-contravention period due to ICO activity and in the last 12
months due to DeFi activity.
The ban on ICO advertising severely hindered the ability of
cryptocurrency projects to raise funds, which in turn led to large
drops in the price of ETH. See 1 Mar Affidavit [24 - 65] (CCB
pp208 - 213) and Annexes H and K charts (pages 125-127 & 136)
(CCB pp235 - 237 & 246).
The evidence of the Applicant's losses from selling ETH at prices
which were substantially lower than they would have been but for
the Respondents' contraventions is set out in the 10 Dec Affidavit
[5 - 23] (CCB pp117 - 119) and 19-22 (Annexes D - F)
(CCB pp134 - 137).

Loss of Business Opportunity

The Applicant commenced a cryptocurrency consulting business named
"Grant Hamilton Crypto Advisory" (GHCA) focusing on legal,
technical and accounting advice regarding cryptocurrencies in early
March 2018.
The Applicant was unable to advertise to potential clients using
the Respondent's platforms due to their Ad Bans. See 10 Dec
Affidavit [29]- [34] (CCB p119) and Annex G (CCB
pp138 - 143).
As a result of this, the Applicant was unable to obtain paying
clients and lost the opportunity to create a lucrative consulting
business.

Loss of amenity and income

Partly as a result of the Banfield Campaign [SoC 141] of
advertising for new users on the Respondent platforms, social media
/ blogging applications based on the Steem / Hive blockchain were
growing very rapidly in number and activity of users and the amount
of content posted prior to the Ad Bans (CCB pp119 - 122, 323).
These metrics of new users, new posts and comments and monthly
active users "Metrics") are important measures of the success
and attractiveness of any social media or blogging application as
evidenced by the focus on these and related metrics in Facebook's
Annual Report (CCB pp20 - 22).
After the Ad Bans, all these Metrics went into steep decline
causing loss of amenity and income to the Applicant in the
following ways:
1. Fewer new users each week decreased the likelihood that the
  Applicant's existing social and professional contacts would
  join and interact with the Applicant on his preferred social
  network and that he would be able to reward them with
  financially valuable upvotes and be in turn rewarded
  financially by them for his posts and comments.
2. Fewer new posts meant that the Applicant had less content
  (including news) to peruse, vote and comment on and thus had to
  also rely on other platforms that did not reward him
  financially for his participation.
3. An overall smaller community provided for less of the
  Applicant's online needs for community than would have been the
  case if growth had not been halted by the Ad Bans.
As of 10 Dec 2020, the Applicant had earned 3669 Hive Power (HP) as
author rewards and 849 HP as curation rewards from his activities on
his @apshamilton account on the Steem/Hive blockchain (CCB
p322).
While this is a relatively small amount of income at current Hive
prices (US$0.20 - $0.40), if the Metrics had continued to increase
at the rate they had before the Ad Bans it is likely that the price
would have also continued to rise from the $5+ it was before the Ad
Bans to even higher levels (CCB p323).
Thus the Applicant has lost both amenity and potentially quite
substantial income from the Respondents' contravening conduct.

Injunction and Declaration

Alternatively, in the event that the Court does not find a prima
facie case on the Applicant's personal damages claim, the
Applicant submits that a representative party whose only interest
is the public interest (seeking a s80 injunction or s163A
declaration under the Act) may commence representative proceedings
on behalf of group members who have damages claims against all
Respondents.
It has been established for more than 40 years that an Applicant
seeking an injunction under s80 of the Act can be "any person" and
does not need to show damages or any special interest in the
subject matter of the dispute^[18]. "It is established that any
person has standing to bring such an application"^[19].
Even when an applicant is personally affected by infringing
conduct their entitlement to bring a claim under s80 (or s163A)
does not arise from that private interest but "springs from the
fact that proceedings under s 80 involve the public interest".^[20]
It is well established that a "claim" for the purposes of s 33C of
the Federal Court of Australia Act 1976 ("FCA Act") includes
claims for an injunction under s 80 and a declaration under s 163A
of the Act.^[21]
In both ACCC v Golden Sphere^[22] and ACCC v Chats House^[23]
the ACCC, with only a public interest claim, successfully commenced
representative proceedings on behalf of group members with damages
claims.
The members of the Full Court in Bray Appeal had different
approaches as to the interpretation of s33C, but all accepted this
proposition. Carr and Finklestein JJ ruled that "claim" should be
construed broadly to include a cause of action under ss80 or
163A. Branson J ruled that a claim under ss80 or 163A was a single
claim, whether made by a representative applicant only, or it and
all group members.
Thus it is entirely open under s33C of the FCA for an Applicant
seeking an injunction and / or declaration, with no personal
damages claim or special interest, to commence proceedings
representing Group Members all of whom have damages claims against
the same Respondents, where there are substantial common issues of
fact or law.
Section 33D(1) of the FCA Act provides that a person who has
sufficient interest to commence proceedings on their own behalf has
sufficient interest to commence representative proceedings. This
interest may be a public interest as well as a private interest.
Section 33D(2) of the FCA Act provides that even where the
representative applicant ceases to have any claim against the
respondent, it may continue to prosecute the proceedings as
representative applicant. Thus the group members' damages do not
have to be proven via the representative applicant's personal
damages.
The judgement of Branson J in Bray Appeal supports the above
proposition and her previous decision in Chats House.
Conversely, she rules against the related but separate proposition
that a public interest claim by group members can support a
representative action where those group members do not all have
damages claims against all the Respondents.
She distinguishes^[24] between the situation in both Golden
Sphere and Chats House, and the situation in Bray Appeal,
where the representative party did have a damages claim, but not
all group members had damages claims against all respondents and
thus sought to rely on public interest claims to unite them in a
single representative proceeding.
Branson J specifically states that it is not necessary to give
consideration to cases where all group members have a damages claim
against all respondents or where a representative party, such as
the ACCC, only has a public interest^[25].
It is in light of the above that the ratio of Branson J's
decision on this issue must be read.
She finds that a public interest claim is a single claim and does
not result in "persons who have claims" but instead is "persons
who all make the same claim"^[26]. She does not rule that a public
interest claim is not a claim for the purposes of s33C(1) of the
FCA Act, only that it is a single claim, irrespective of the number
of people bringing it.
This is a finding consistent with a representative party using a
public interest claim as its claim for the purposes of s33C(1) of
the FCA Act so long as all the group members have their own claims
for damages against all the respondents.
Carr J ruled that a public interest claim was a claim for the
purposes of s33C(1) of the FCA Act for both a representative party
and for each group member. He took a broad view of the meaning of
"claim" and said it included a cause of action such as an
injunction^[27].
Finklestein J took a similar broad view to Carr J of the meaning of
"claim" and did not make any ruling contrary to the proposition
that a representative party whose only interest is the public
interest may commence representative proceedings on behalf of group
members who have damages claims^[28].
Thus the opinions of all three Justices in Bray Appeal, as well
as the opinion of the trial Judge in Bray No. 2 and the decisions
in Golden Sphere and Chats House all support the Applicant's
position on this issue.

Other potential issue regarding prima facie case

In Epic Games and Dialogue Consulting v Instagram^[29] the US
based Big Tech respondents attempted to use exclusive jurisdiction
and arbitration clauses in their click-wrap contract with each
applicant to have proceedings before this Court stayed.
No such issues arise in these proceedings for a range of reasons.
Firstly, this case relates to cartel and anti-competitive conduct
arising from provisions in the Respondents' Standard Contracts with
acquirers of online advertising services.
The Applicant is not and has never been a party to a contract with
either Respondent for the supply of online advertising services
(CCB p272).
As is typical in a cartel case, the Applicant is claiming damages
from the effect of a cartel formed between other persons. This case
relates to other people's contracts, not any contract
of the Applicant.
Secondly, the Applicant has never had contractual relations with
the First Respondent (CCB pp272 - 273).
The Applicant terminated his user contract with Facebook Ireland,
in March 2018, prior to the First Respondent becoming party to user
contracts with persons residing outside North America (from 19
April 2018) (CCB p273).
The exclusive jurisdiction clause in the Facebook Ireland Statement
of Rights and Responsibilities (clause 15 (CCB p50)) only
applies to disputes with Facebook Ireland ("us" is defined as
Facebook Ireland in clause 18 (CCB p51)), not with the First
Respondent.
This clause does not, on its terms, encompass the claims in these
proceedings and should be read narrowly against the drafter.
The Applicant's contractual relations with the Second Respondent is
limited to the general consumer Google Terms of Service (CCB pp96
& 110). The Applicant is not and has never been party to Google's
Adwords Advertising Program Terms (CCB p77) which contain the
polices which the Applicant alleges are cartel provisions and are
anti-competitive (CCB p273).
The exclusive jurisdiction clause of Google's Terms of Service is
limited to "disputes arising out of or relating to these terms,
service-specific additional terms, or any related services."
(CCB p106)
This clause does not, on its terms, encompass the claims in these
proceedings and should be read narrowly against the drafter.
Finally, as examined in detail above, where a person brings a claim
for an injunction under s80 of the Act or for a declaration under
s163A of the Act, that claim is a public interest claim.^[30]
For the reasons set out in Epic Appeal, many of which are
directly applicable to these proceedings^[31], there would be
strong reasons to refuse any stay application even if the Applicant
were bound by relevant jurisdiction or arbitration clauses.
A person bringing such a claim is effectively exercising a
delegated power of the Sovereign to enforce its own law. As such,
just as the Sovereign cannot be forced into a foreign court to
enforce its own law, nor can any person bringing a claim under s80
or 163A of the Act.
Furthermore, ss 45AF and 45AG set out criminal offenses in relation
to the same cartel conduct which the Applicant is bringing public
interest claims under ss80 and 163A. The declaratory relief sought
by the Applicant is thus part of the enforcement of the criminal
law of Australia and must be heard in Australian Courts.

Substituted Service

The relevant principles for substituted service in circumstances
very similar to those of these proceedings are set out in AIC No
1^[32].
The Court may take judicial notice under s 144(1)(a) of the
Evidence Act 1995 that COVID-19 remains a global pandemic that is
directly affecting the USA.
Both Respondents are currently engaged in proceedings before this
Court: Australian Information Commissioner v Facebook Inc & Anor
NSD246/2020; and Australian Competition and Consumer Commission v
Google LLC NSD816/2020.
Both Respondents have filed Notices of Address for Service and
appointed large local law firms to represent them in those
proceedings.
Even if it is possible at the present moment to serve the
Respondents via the Hague Convention mechanism and using the
services of ABC Legal to effect service, as Thawley J stated in
Australian Information Commission at [75] because of "the
rapidly changing and evolving environment caused by the current
pandemic; the present situation may have changed by the time
service in the relevant way would be sought to be effected."
In light of the above it is impractical to serve the Respondents in
accordance with the Hague Convention and highly practical to serve
them at the email addresses of the major local law firms they have
appointed to represent them in concurrent proceedings before this
Court. This email can be followed up with a phone call to the
relevant law firm to ensure the email has been received.
The proposed method of substituted service is plainly likely to
bring the proceedings to the attention of the Respondents and will
do so more reliably, efficiently, quickly and inexpensively than
service in accordance with the Hague Convention.
For the above reasons, the proposed method of substituted service
is consistent with the overarching purpose of the civil practice
and procedure provisions as set out in section 37M of the FCA Act.
In the event the Court is not satisfied of the impracticality of
serving the Respondents in accordance with the Hague Convention,
the Court may exercise its powers to dispense with the
impracticability requirement of FCR r 10.24 using its powers under
FCR r 1.34.

__________________________________

Signed by the Applicant, Andrew Hamilton, Solicitor (NSW) on 15 July
2021

Air New Zealand Ltd v Australian Competition and Consumer
Commission; PT Garuda Indonesia Ltd v Australian Competition and
Consumer Commission [2017] HCA 21per Kiefel CJ, Bell and Keane JJ
at [12]. ↩
Boral Besser Masonry Ltd v Australian Competition and Consumer
Commission [2003] HCA 5; (2003) 215 CLR 374 per McHugh J at
455-456 [252]. ↩
Seven Network Limited v News Limited [2009] FCAFC 166 at
[611] - [623] per Dowsett and Lander JJ. ↩
This includes separate markets for each major sport (Seven
Network at [621] and the long line of US case law cited at
[618]), for bananas vs fresh fruit generally (United Brands
Company and United Brands Continentaal BV v Commission of the
European Communities. Chiquita Bananas. Case 27/76. European Court
Reports 1978 -00207), for tea vs coffee (Arnotts Ltd v Trade
Practices Commission (1990) 24 FCR 313 at 332; 97 ALR 555 at
576-7). ↩
The term "firm" is used here in its economic sense to mean a
supplier of goods or services and encompasses individuals and
decentralized blockchains as well as traditional corporations,
partnerships, cooperatives etc. ↩
QCMA at ALR 515[40]; ATPR, [17,246]; AGL v ACCC at
[349]. ↩
QCMA at ALR 515[40]; ATPR, [17,245] Emphasis added. ↩
Only permitted with special approval (and thus still restricted)
by Facebook after 8 May 2019 (CCB pp73-76) and still
specifically prohibited by Google, as at 3 Sept 2020 (CCB p94). ↩
Only permitted by Facebook after 8 May 2019 (CCB pp73-76) and
still prohibited, as at 3 Sept 2020, by Google's prohibition on
"otherwise promoting the purchase, sale or trade of
cryptocurrencies or related products" (CCB p94). ↩
ibid. ↩
The Explanatory Memorandum to the Bill which amended the Act to
introduce the concept of concerted practices to section 45. ↩
ACCC Guidelines on concerted practices, August 2018, at
[5.1(c)]. ↩
Berry v CCL Secure Pty Ltd [2020] HCA 27 at [32-36];
Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR
332; (1994) 120 ALR 16; (1994) 68 ALJR 313; (1994) ATPR 41-30 at
[38 - 40] as per Mason CJ and Dawson, Toohey and Gaudron JJ. ↩
TPT Patrol Pty Ltd as trustee for Amies Superannuation Fund v
Myer Holdings Limited [2019] FCA 1747 at [1500 - 1671] "the
price paid upon acquisition and the market price that would have
prevailed absent the alleged contraventions" at [1503]. In the
case of contraventions lowering the price this can be rephrased as
"the price received upon disposal and the market price that would
have prevailed absent the contraventions." ↩
Re Janssen-Cilag Pty Limited v Pfizer Pty Limited [1992] FCA
437; (1992) 14 Atpr 41-186 (1992) 37 FCR 526 (8 September 1992) at
529 [15] cited with approval in TPT Patrol at [1567]. ↩
Lamb v Cotogno [1987] HCA 47; (1987) 164 CLR 1 at [10-11] ↩
*Musca v Astle Corporation Pty Ltd *[1988] FCA 4; (1988) 80 ALR
251 at [102] ↩
Truth About Motorways Pty Limited v Macquarie Infrastructure
Investment Management Limited [2000] HCA 11 at [9, 13, 20] per
Gleeson CJ & McHugh J [26, 30] per Gaudron J [71, 73] per Gummow
J; Phelps v Western Mining Corporation Ltd (1978) 20 ALR 183 at
[189]; Epic Games, Inc v Apple Inc [2021] FCAFC 122 ("Epic
Appeal") at [23 - 24]. ↩
Epic Games, Inc v Apple Inc (Stay Application) [2021] FCA 338
at [56]; Epic Appeal at [53]. ↩
ibid. ↩
Bray v F Hoffmann-La Roche Ltd [2002] FCA 1405
("Bray No 2") at [39 - 48]; Bray Appeal at
[113 - 121] per Carr J, at [210] per Branson J at [243 - 245]
per Finklestein J. ↩
Australian Competition and Consumer Commission v Golden Sphere
International Inc (1998) 83 FCR 424. ↩
Australian Competition and Consumer Commission v Chats House
Investments Pty Limited (1996) 71 FCR 250. ↩
Bray Appeal at [197 and [207]. ↩
id. at [208]. ↩
id. at [210]. ↩
id. at [121] and [113]. ↩
id. at [245] ↩
Dialogue Consulting Pty Ltd v Instagram, Inc [2020] FCA 1846. ↩
See previous section entitled "Injunction and Declaration". ↩
Epic Appeal, particularly at [97 - 110]. ↩
at [62] to [75]. ↩

Crypto Class Action Update - Submissions for Hearing on Leave to Serve - Part 2