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

Table 3: Parker market share estimates for 2018–19 (%)

As already explained, the relevant market in this case is the wholesale market. It was common ground that market shares on that market could be derived from the retail market shares, but the experts differed as to what adjustment that would require.

Mr Colley said that the time lag of 2–4 months between placing a wholesale order and delivery to the retailer meant that, in order to assess MGA’s market share on the wholesale market during the main period of the alleged abuse, namely from May to December 2017, it is necessary to consider MGA’s retail share from July 2017 onwards. On that basis, and on Mr Colley’s market definition, MGA’s market share was well above 50%. Cabo’s submission was, therefore, that on a correct market definition and with an appropriate time lag MGA’s market shares were strongly indicative of dominance. Given that MGA’s market shares were even higher in 2018, Cabo said that this showed a position of market power which was sustained and therefore not ephemeral.

Cabo also relied on further factors which in its submission supported the conclusion that MGA was dominant during the relevant period: (i) the fact that the key retailers regarded LOL Surprise as a “must-stock” product during the relevant period, and therefore lacked bargaining power in negotiations with MGA; (ii) the barriers to entry and expansion in the toy market, which Cabo said are high; (iii) MGA’s conduct, which Cabo said was probative of dominance.

MGA’s starting point was that on the basis of Mr Parker’s market definition, MGA’s market shares were not at any point high enough to support a finding of dominance: its highest monthly market share was 26.69% for October 2017. In addition, MGA contended that in order to establish dominance, it is necessary to show a high market share over a sustained period. If MGA’s market share during 2017 were to be calculated using rolling averages for the previous 12-month period, that would give even lower market share figures.

Mr Parker had not applied a wholesale to retail time lag in his market share calculations. At the trial, however, MGA did not seriously dispute the necessity to take account of a time lag, although it said that the better view was that the time lag should be closer to a month on the basis of the factual evidence. On Mr Parker’s market definition that did not make any difference to the conclusion.

As to the other relevant factors, MGA said that barriers to entry were low, and that there was countervailing buyer power from strong retailers. Mr Parker’s view was that being a “must stock” product added nothing to the market share assessment. MGA’s conduct was, in MGA’s submission, simply an example of relative bargaining power: that LOL Surprise was simply more attractive than Worldeez, such that retailers preferred to stock LOL Surprise when given a choice.

In relation to the court’s request, after the trial, for the parties to provide estimated market shares for the extended Colley market described at §253 above, the parties agreed that a robust calculation would need evidence from the industry experts to identify the additional collectible toys to include in that market. As a proxy, BRG (instructed by MGA) added into Mr Colley’s market all toys in brands identified by Ms Munt as “surprise collectible brands”, whether or not the specific toys had a surprise element or not, and also added all toys in the playset dolls and accessories subsegment with a name indicating a surprise element (i.e. products containing the words “mystery”, “surprise” or “blind” in their names).

Cabo objected that these additions were too wide, because they included toys which did not have any surprise element, as well as toys falling under the playset doll accessories subclass which were therefore categorised as accessories rather than dolls. Cornerstone Research (instructed by Cabo) therefore provided an alternative calculation that was limited to the addition of toys in the playset dolls and collectibles class, with product names indicating a surprise element.

The two sets of market share figures produced on these bases were as follows: