Epic appealed that ruling, arguing the public policy issues surrounding Apple’s App Store were more important than jurisdictional issues. On Friday the Full Federal Court, which heard the appeal, found in Epic’s favour.
Because the games company had also sued Apple in the United States for much the same thing, Apple successfully argued in April that the Federal Court lawsuit in Australia should be stopped, in favour of the US one.
“Epic Games is pleased that our case will proceed with the Federal Court and be examined in the context of Australian laws,” the company said in a statement.
“We look forward to continuing our fight for increased competition in app distribution and payment processing in Australia and around the world.”
“This is a positive step forward for Australian consumers and developers, who are entitled to fair access and competitive pricing across mobile app stores.
Apple said it would appeal the judgment.
“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,” it said in a statement.
Epic’s lawsuit comes as pressure grows worldwide on Apple and Google to change the way they do business through their respective App Store and Play Stores.
As part of its long-running enquiry into the power of Big Tech, the Australian Competition and Consumer Commission is investigating whether Apple and Google are abusing the stranglehold they have over the distribution of apps, at the expense of competition. The ACCC backed Epic’s appeal, furnishing the Full Federal Court with an analysis of how competition law applies to app stores, and on Friday it welcomed the ruling.
“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,” ACCC Chair Rod Sims said in a statement. “We will continue to take a strong interest in this case, which raises important issues for competition in the digital marketplace,” he said.
In the USA, attorneys-general from 36 states filed an antitrust lawsuit against Google this week, too, alleging the 30 per cent commission Google charges for transactions was “extravagant”, and that Google illegally used its power to promote its Play Store at the expense of competing app stores. The lawsuit alleged, among other things, that Google made a “direct attempt to pay Samsung to abandon relationships with top developers” in order to ensure that the Google Play Store maintained its dominance.
Unlike Apple, Google allows other companies to set up app stores on its phones and allows customers to “sideload” apps directly onto Android phones without using any app store. In practice, those allowances have made little difference to the Play Store’s dominance in the Android ecosystem. In its interim report into the power of app stores in Australia, the ACCC found “these options provide little competitive constraint on app marketplaces,” and that more than 90 per cent of Android apps were installed through Google’s Play Store.
Nevertheless, Google seized on the alternative ways of installing Android apps in its defence of the Play Store this week, arguing the anti-trust case in the US was “a meritless lawsuit that ignores Android’s openness”. “Android and Google Play provide openness and choice that other platforms simply don’t,” Google’s senior director of public policy, Wilson White, wrote in a blog post, in an apparent reference to Apple’s much-more closed App Store.