The fight between Epic Games, the company behind the wildly popular video game Fortnite, and tech giant Apple, which banned the company from its App store in August last year, is currently playing out in the Australian legal system, as well as the US, UK and Europe
Last month Epic Games announced it had filed an antitrust complaint against Apple in the European Union (EU).
The complaint, filed with the European Commission’s Directorate-General for Competition, alleges that through a series of carefully designed anti-competitive restrictions, Apple has not just harmed but completely eliminated competition in app distribution and payment processes.
Epic has lodged similar claims on four continents now, alleging that Apple uses its control of the iOS ecosystem to benefit itself while blocking competitors and its conduct is an abuse of a dominant position and in breach of EU competition law.
Fortnite is one of the world’s most successful games, with more than 350 million registered users – more than 116 million on iOS last year when it was blocked on the App store.
Apple is one of the world’s most valuable companies, with a market capitalisation of more than US$2 trillion.
Epic Games founder and CEO Tim Sweeney said “the very future of mobile platforms” is at stake in the legal actions when launching the new case in the EU.
“Consumers have the right to install apps from sources of their choosing and developers have the right to compete in a fair marketplace,” he said.
“We will not stand idly by and allow Apple to use its platform dominance to control what should be a level digital playing field. It’s bad for consumers, who are paying inflated prices due to the complete lack of competition among stores and in-app payment processing. And it’s bad for developers, whose very livelihoods often hinge on Apple’s complete discretion as to who to allow on the iOS platform, and on which terms.”
It’s a battle the gaming company is also running against Google too.
The dispute began when Epic gave Fortnite players on iOS a choice between Apple payment and Epic direct payment. Apple viewed that as a breach of its terms and conditions and blocked Fortnite on its App store, preventing updates of the game.
Epic’s direct in-app payment system circumvents Apple’s and Google’s own payment systems, which charge a 30% fee for in-app purchases and app sales.
Epic says its legal actions are bigger than Epic versus Apple and go “to the heart of whether consumers and developers can do business together directly on mobile platforms or are forced to use monopoly channels against their wishes and interests”.
Epic has asked the EU Commission to imposing timely and effective remedies on Apple, but is not seeking damages in that jurisdiction as is the case in the US, Australia and the UK cases.
In Australia, another step in the legal battle unfolded this week before Justice Nye Perram in the Federal Court.
The case got underway in December and Apple is seeking to have the matter thrown out, seeking a permanent stayin of proceedings arguing that the matter belongs exclusively before the California courts.
Apple’s stay application is set down for later this month on March 23.
Meanwhile, Epic issued a notice to produce documents to Apple, which Apple is fighting, arguing that Epic does not seek material relevant to issues involving the application for a permanent stay; and that the volume of documents sought “is oppressive”.
Epic is seeking details such as the number of Australian Apple ID accounts; the number of apps available for download on the Australian App Store; the number of apps downloaded in Australia over a 12 month period; and the dollar value of transactions in Australia through Apple’s platform over a 12 month period.
On Tuesday, Justice Perram handed down a ruling on the dispute saying he didn’t agree with Apple’s submission that the information sought was not relevant to establishing the relationship between Apple and Epic.
Nonetheless, His Honour accepted Apple’s application to set aside the notice to produce the documents but issued a warning that he’ll revisit the matter if the parties can’t come to an agreement about the level of documentation required.
“Although I agree with Epic that Apple’s evidence about the traumas Apple will now suffer if required to comply with the notice should perhaps be taken with a grain of salt, I accept Apple’s basic point that the work required to respond to the information which Epic seeks is quite disproportionate to what is actually being sought,” he said.
“I accept Apple’s submission that the notice, as framed, could require the production of a very considerable body of documentation. For example, although paragraph 1 of the notice seeks really only to find out how many active Apple ID accounts there were for iOS devices in Australia on 19 January 2021, requiring Apple to produce every document it has which might reveal that fact resembles in its forensic precision the cheerful pastime of drift netting.”
Epic’s Australian case now rests on Apple’s application to Justice Nye to call a halt to it, which will be heard on March 23.