HP-2020-000016 - [2025] EWHC 1451 (Ch)

The next question is whether there is evidence of significant competitive constraints on LOL Surprise from products outside the markets used for the market share analysis. Leaving aside the submissions on the materiality of the distinction between products with a single and multiple layers of surprise, which is addressed with the extended Colley market analysis, Mr Parker contended that Barbie in particular competitively constrained LOL Surprise. The evidence on this point was, however, largely discredited at the trial. Mr Parker attempted to address this in his brand-by-brand revenue analysis in his eighth and ninth reports, which I have described above at §215. That listed Barbie as being a close substitute for LOL Surprise, at least during 2018. Mr Parker eventually conceded, however, that this analysis was unreliable (see §§240–241).

Mr Parker also relied on the evidence of MGA’s toy expert Mr Harper to the effect that Barbie and LOL Surprise were competitors. Mr Harper’s assessment was, however, based on little more than the observation that the two products appeal to the same target audience, a point picked up in a 2018 internal MGA study. Ms Munt agreed that girls might own both brands and play with them together. She nevertheless took the view (in both her written and oral evidence) that collectibles such as LOL Surprise and fashion dolls such as Barbie have very different product features and play patterns, such that they should not be regarded as substitutable. Ms Munt’s reasoning was, in my judgment, more solidly based than that of Mr Harper.

MGA also relied on internal MGA emails comparing sales of LOL Surprise with other brands, including Barbie, and a comment from Mr Larian “Let’s crush that bitch like we did in 2005 once and for all”. That reflects Mr Larian’s continuing rivalry with Mattel, but does not come close to showing that Barbie acted as an “immediate and effective” competitive constraint on LOL Surprise.

MGA’s closing submissions eventually said little more than that Barbie and LOL Surprise “have a competitive interaction”. What MGA conspicuously did not say was that the closeness of the constraint was such that MGA could not be regarded as dominant in relation to the supply of LOL Surprise. This illustrates the importance of drawing a distinction between products that are close competitors of the focal product, and products for which there is some competitive interaction but which could not realistically be regarded as a sufficiently close substitute that they would constrain the market conduct of the supplier of the focal product. There was undoubtedly a degree of competitive interaction between LOL Surprise and Barbie, and indeed other products which were not in Mr Colley’s product market such as My Little Pony. That does not, however, mean that those products acted as effective competitive constraints on LOL Surprise: there was no evidence that they did so, or were likely to have done so by virtue of their characteristics.