The Federal Court of Australia (Beach J), has delivered judgment in Epic Games v Apple Inc; Epic Games v Google; and two class actions.
Epic alleged that the conduct of Apple and Google’s app stores and payment processing systems were, amongst other things, a misuse of market power in contravention of s46 the Competition and Consumer Act. The judgment, principally in favour of Epic, followed a 4 month trial in 2024.
Epic produces the video game, Fortnite, which was distributed via Apple’s App Store and Google’s Play Store. Apple prohibits the installation of other app stores on its devices. Google only permits other app stores to be installed via “side loading.” Both companies only permit payments to be processed for purchases made in their app stores via their own respective payment systems. Google and Apple charge app developers commissions of up to 30% to process payments.
In 2020, Epic introduced its own payment processing system. In response, Apple and Google removed Epic from its app stores for breaching their terms and conditions. Following this, Epic commenced these proceedings and other proceedings around the world.
In judgment delivered yesterday, Beach J held that Apple and Google’s prohibitions on payment processors (and in respect of Apple, also its app store), had the effect of substantially lessening competition in contravention of s46. His Honour acknowledged that each company had legitimate interests in maintaining privacy and security by deploying the contravening prohibitions, but the security benefits did not outweigh anti competitive effects.
His Honour also found that Google’s Project Hug initiative, in which the company paid developers to discourage them from opening competing stores, had the purpose of substantially lessening competition. Other claims concerning unconscionable conduct, and the use of technical constraints to lessen competition that were made against Apple and Google were dismissed.
Reasons are currently embargoed pending confidentiality orders. A relief hearing will be set in due course, as well as a hearing to determine damages in the class actions, which benefit from the findings made in favour of Epic.
Ruth Higgins SC, Anais d’Arville and Kate Lindeman appeared on the Counsel team for Epic.
Robert Yezerski SC, Peter Strickland and Jacqueline Ibrahim were on the Counsel team for Google.