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

As set out above, unlike Mr Colley, Mr Parker placed very heavy reliance on an analysis of NPD revenue data. His central observation was that over the period 2017–2021, when the fashion dolls segment grew, the playset dolls segment shrank, and vice versa (see §214 above). He also noted that the combined size of the two market segments was broadly constant during that period. He contended that this demonstrated “a pattern of demand being substituted between Playset Dolls and Fashion Dolls”. On that basis he concluded that fashion dolls and playset dolls were in the same relevant product market during that period, and that there was not, during the relevant period, a narrower relevant market for substitutes for LOL Surprise. As explained at §215 above, Mr Parker’s alternative analysis of individual product substitutes for LOL Surprise likewise rested on considering the brands which lost sales at the period of LOL’s growth in revenue.

There are several fundamental problems with that approach. The first is the point discussed above in relation to Mr Colley’s comments on sales revenues: that a correlation (even a very strong correlation) between revenue patterns does not establish causation and therefore demand substitution, given the numerous other factors that could have influenced those revenue changes. That problem undermines both Mr Parker’s primary correlation analysis, and his alternative analysis of individual brands.

This issue was particularly evident on examination of Mr Parker’s alternative analysis of individual brands. That analysis produced lists of brands within the playset dolls category which Mr Parker considered were the “strongest economic substitutes” for LOL Surprise, on the sole basis that their sales fell during periods in 2017 and/or 2018 in which the sales of LOL Surprise increased. One obvious problem was that this analysis produced the incoherent result that some products would be regarded as close substitutes in one year but not the next, e.g. Num Noms and Barbie (on the list of close substitutes for 2018, but not for 2017). Both the 2017 and 2018 lists also notably excluded Hatchimals Colleggtibles, on the basis that during both periods the sales of this product increased rather than decreased. The toy experts agreed, however, that Hatchimals Colleggtibles was a surprise collectible product that offered a sophisticated unwrapping experience (featuring a small animal toy that “hatched” from an egg: see the first picture below). Its product characteristics therefore indicated that it was a close substitute for LOL Surprise – and at least as close a substitute as some of the other products in Mr Parker’s lists (e.g. Num Noms, which are scented food-related collectibles in the form of mini lip glosses contained within a pot designed to look like a yoghurt pot: see the second picture below).