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Epic Games’ Apple App Store beef allowed to proceed in the Australian courts

By | Published on Tuesday 13 July 2021

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The Australian Federal Court last week said that legal action filed in the country by Fortnite maker Epic Games that accuses Apple of anti-competitive practices can proceed, despite it replicating the Epic v Apple dispute in the Californian courts.

Epic went to war with Apple back in 2020 over the latter’s App Store rules and in particular what they say regarding in-app payments. Epic argues that Apple’s insistence that in-app payments on iOS devices are made via the tech giant’s own commission-charging payment platform, and that companies can’t even sign-post alternative payment options from within their iOS apps, is anti-competitive.

The gaming company is not alone in making this claim, of course, with many app-makers criticising Apple’s policies in this domain, not least Spotify, which has been pursuing its App Store grievances through the regulatory system in the European Union. For its part Epic launched legal action in the USAustralia and the UK, alongside a major anti-Apple PR campaign mainly targeted at Fortnite’s massive loyal user-base.

Most attention so far has fallen on the legal battle in the US, which reached the courtroom in May, with both Tims – which is to say the bosses of both Epic and Apple, Tim Sweeney and Tim Cook – among those to testify. Although many legal experts initially reckoned that Epic’s claims under US competition law were somewhat ambitious, the judge hearing the case seemed to be pretty much on the fence during that hearing. We now await her judgement.

Prior to the May court hearing in California, back in April, Apple successfully persuaded the Australian court where Epic had gone legal to pause that particular lawsuit because of its similarity with the litigation already happening Stateside. After all, the tech giant argued, Apple’s App Store agreement which Epic had signed specifically falls under the jurisdiction of the Californian courts.

However, Epic appealed that decision and last week a full session of the Australian Federal Court ruled that the judge who stayed the case in April got it wrong. There were various reasons given for over-turning the original ruling, though key to it all was that the original judge hadn’t considered all the arguments against any delay together. It’s when all the arguments are combined that there is a compelling reason for the Australian case to proceed alongside the US one, last week’s ruling said.

One of those arguments in favour of allowing the Australian case to proceed is that Epic’s complaints regarding the Apple App Store rules raise important questions regarding Australian competition law that apply far beyond Fortnite. And that argument was backed by the Australian Competition And Consumer Commission, which supported Epic’s appeal.

Its Chair Rod Sims welcomed last week’s court decision, stating: “There are public policy reasons why Australian competition law cases, which deal with conduct that impacts on Australian markets and Australian consumers, should be heard in Australia by Australian courts. We will continue to take a strong interest in this case, which raises important issues for competition in the digital marketplace”.

Needless to say, Epic also welcomed last week’s ruling. A spokesperson said: “Epic Games is pleased that our case will proceed with the Federal Court and be examined in the context of Australian laws. This is a positive step forward for Australian consumers and developers, who are entitled to fair access and competitive pricing across mobile app stores. We look forward to continuing our fight for increased competition in app distribution and payment processing in Australia and around the world”.

Meanwhile, Apple confirmed it would appeal the appeal. Its spokesperson added: “The initial decision in April from Australia’s Federal Court correctly ruled that Epic should be held to the agreement it made to resolve disputes in California. We respectfully disagree with the ruling made today and plan to appeal”.