Complaining that Apple’s hard-line control of its App Store is in violation of the Australian User Code, smash hit Fortnite could sue Apple in Australia for unlawful control over its iPhones and iPads, the Federal Court has found. Epic Games first sued Apple in November 2020.
Because the gaming company has also sued Apple in the United States for the same thing, Apple successfully argued in April that it should suspend the Federal Court in Australia, in favor of the US.
Epic pleaded guilty, arguing public policy issues around Apple’s App Store are more important than litigation cases. On Friday the full Federal Court, which heard the appeal, found favor in Epic.
“We are delighted that our case will continue with the Federal Court and we are considering the matter under Australian law,” the company said in a statement.
“This is a positive step forward for Australian consumers and developers, who are entitled to access to authenticity and competitive pricing across mobile app stores.
“We hope to continue our fight for increased competition in app sharing and payment processing in Australia and internationally.”
Apple said it would appeal the decision.
“The first decision in April from the Federal Court of Australia ruled fairly that Epic should apply to the agreement it made to resolve disputes in California. “We respectfully agree with today’s verdict and plan to call it quits,” in a statement.
Epic is coming as pressure grows globally on Apple and Google to change the way they trade through the App Store and Play Store.
As part of its long-term investigation into the power of Big Tech, the Australian Competition and Consumer Council is investigating whether Apple and Google are abusing the silence they have on app distribution, despite competition.
The ACCC supported Epic’s appeal, providing the Federal Court in full with an analysis of how competition law applies to app stores, and on Friday upheld the ruling.
“Public policy reasons why Australian competition law issues, which deal with behavior affecting Australian markets and Australian consumers, should be heard in Australia by the courts Australia, ”ACCC Chairman Rod Sims said in a statement.
“We will continue to have a strong interest in this case, which raises important issues for competition in the digital marketplace,” he said.
In the US, lawyers from 36 states have filed an antitrust complaint with Google this week, alleging that Google’s 30% tariffs for businesses are “fraudulent,” and that Google is illegally using its power to do so. Play Store promotion is at the expense of competing app stores.
The lawsuit alleges, among other things, that Google made a “direct attempt to pay Samsung for abandoning relationships with top developers” in order to ensure that the Google Play Store maintains its dominance.
Unlike Apple, Google allows other companies to set up app stores on their phones and allows customers to “load side” applications directly on Android phones without using any app store. In practice, those permits have slightly differentiated the Play Store capability in the Android ecosystem.
In its interim move into the power of app stores in Australia, ACCC found “these options provide some competitive advantage over app stores,” and that more than 90 percent of Android apps are installed through Play Google Store.
However, Google adopted alternatives to installing Android apps in its Play Store security this week, arguing the trust-based issue in the US is “an unfair lawsuit against the unlocking of Android”.
“Android and Google Play provide the opening and choice of other platforms is not a coincidence,” Google chief executive of public policy, Wilson White, wrote in a blog post, in an explicit reference to the App Store Apple’s massive closure.
Protecting 30 percent of Google’s share on Play Store sales and in-app purchases, Mr White said 97 percent of founders on the Play Store did not pay commission because they did not sell anything.
Those who are slugged with the commission are the “largest and most profitable” producers who account for “less than 0.1 per cent” of the producers on the store, he said. “This case is significant in the 0.1 position of advertisers.”