On 17 November 2020, Epic Games, creators of the widely popular game Fortnite, filed a lawsuit in the Federal Court of Australia to ‘end Apple’s anti-competitive restrictions on mobile device marketplaces.’
The background for the proceedings originated in the US and concern the forcible use of Apple’s in-app payment system on the App Store. Many may not know this but Apple charges a 30 per cent fee on all payments in the App Store, so to offer its consumers more choice and a cheaper price, Epic introduced a direct payment for Fortnite players. Naturally, Apple retaliated by placing restrictions on Fortnite, blocking updates of the game across all iOS platforms, and threatened to prevent Epic from creating any future software on any Apple devices unless they engaged in an agreement to maintain a monopoly over in-app Apple payments. Surprisingly enough, Epic rejected this ‘as a matter of principle’, claiming abuse of market power that substantially lessens competition in app distribution and payment processes in Australia.
The message behind Epic Games is sound – protect consumers whilst maintaining an open platform where creators are free to do business. As it currently stands, Apple has ‘crippled the [digital] ecosystem by imposing an absolute monopoly on distribution’ placed on in-app purchases. By funneling creators and businesses through Apple’s personalised hardware and software, Apple arguably limits competition and innovation.
Importantly, this case may pave the way for future legislative and regulatory reform in Australia (and even globally) as to smartphone practices and online marketplaces to ensure a free market. Epic Games has claimed that they are not even seeking damages against Apple in Australia but are merely looking to align Apple with Australian competition and consumer law.
It is fantastic to see such initiative from a modern-day corporate giant and it will be interesting to compare the Australian and US Courts stance on this case.
For further reading see ‘Epic Games and Apple Continue Legal Battle in Australian Courts’.