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Global tech

The legal battle by Fortnite maker Epic Games against Apple and Google’s app stores began in Australia’s Federal Court this week

- March 20, 2024 3 MIN READ
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Image: AdobeStock
A five-month legal showdown between three tech titans has kicked off in Australia, with Fortnite-maker Epic Game’s case against Apple and Google to have potentially huge ramifications for how we use our smartphones.

Epic’s legal battle with Apple and Google began in Federal Court in Melbourne on Monday, centred on the dominance of the tech giant’s app stores and their practices of blocking outside methods of downloading apps and facilitating in-app purchases.

The case could have major impacts around the world with how apps are distributed and users make purchases within them, and comes after Epic won a similar legal battle with Google in the US but lost its fight with Apple.

The legal fight is actually four cases which will be heard simultaneously: Epic’s case against Apple, a class action by Australian app developers against Apple; and Epic’s two cases against Google.

It will see Epic argue that Apple and Google are maintaining illegal monopolies through their respective app stores and not allowing users to make fair decisions on how they download apps to their devices and the method in which they make purchases within them.

Apple and Google typically take a cut of up to 30% on every app purchase, and have attempted to restrict in-app purchases to their own payment platforms, meaning they also take a cut.

The case opened on Monday, with Epic’s lawyer arguing that the company is not seeking damages but will push for changes to how Apple and Google operate apps.

“Epic for its part has been motivated to produce system-wide changes that will benefit all developers,” the lawyer said.

Apple and Google’s response

Both Apple and Google have denied that their app stores function as monopolies, and claim there is significant competition in the space.

In a blog post, Google Australia VP of government affairs and public policy, Wilson White, said there are already many ways to distribute apps on Android devices, and that unlike with iOS, 70% of Android devices in Australia come with at least two app stores pre-installed.

“It’s clear that Android and Google Play provide more choice and openness than any other major mobile platform and it’s a model that’s good for Australian developers and consumers,” White said in the post.

“We will continue to vigorously defend our right to a sustainable business model that enables us to keep users safe, partner with developers to grow their businesses and keep the Android ecosystem thriving and healthy for all Australians.”

White said that Epic wanted to “water down or entirely eliminate” security risk warnings that accompany the downloading of apps through different stores.

The issue of whether allowing access to more app stores and payment methods will lead to heightened security risks will likely be a key focus of the case, with Apple and Google making this point in recent weeks.

On the opening day of the case, Epic’s lawyer said these claims “do not survive scrutiny”.

A four-year fight

The legal spat began nearly four years ago when Epic made changes to the massively popular game Fortnite in order to ignore Apple’s App Store payment system that app developers must use for in-app purchases.

Apple promptly removed Fortnite from the App Store, with Epic filing lawsuits against the company and Google on the same day.

Epic filed similar lawsuits in Australia in late 2020, with the company saying it selected this jurisdiction due to its favourable competition laws.

The US lawsuits came to a head late last year and in early 2024.

Epic lost nine of its 10 allegations against Apple in a case overseen by a judge, with the US Supreme Court recently declining to hear an appeal.

The judge ruled that Apple is not a monopolist, but did find that the company must let developers allow in-app purchases outside of its own system.

While finding that Apple had “considerable market share of over 55% and extraordinarily high profit margins” but that “these factors alone do not show antitrust conduct…success is not illegal”.

Epic had more success in its legal fight with Google in the US, with a jury in California unanimously finding that its Google Play Store was operating as an illegal monopoly as Google was stamping out competing stores and charging unjust fees on developers.

The gaming company had argued that Google “suppresses innovation and choice” through a “web of secretive, anti-competitive agreements”, with the jury agreeing with Epic on all counts.

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