Australian court finds Apple and Google breached competition rules with app stores – News

An Australian court has found that Apple Inc. and Google LLC breached local competition laws with their respective app stores.

The ruling was issued today in connection with four different lawsuits. The first two were filed by Epic Games Inc., a major video game developer, while the other two are class-action complaints. It’s believed that the latter cases could expose Apple and Google to hundreds of millions of Australian dollars in liabilities.

Until recently, the two tech giants required mobile developers to use their respective app stores’ payment processing systems for in-store transactions. Google and Apple take a commission from every in-app purchase they process. Until a few years ago, the fee could be as high as 30% for some types of transactions. 

The class-action lawsuits covered by today’s ruling allege that Google and Apple inflated the price of in-app content with their payment processing policies. Epic Games made a similar argument. Additionally, the company charged that Google and Apple made it unnecessarily difficult for users to down its app marketplace. The Epic Games Store, as the service is called, provides access to video games and related content.

The Federal Court of Australia, Australia’s second-highest court, found that Google and Apple’s business practices “had or is likely to have had the effect of substantially lessening competition.” However, the judge presiding over the cases rejected an Epic Games claim that the two tech giants engaged in “unconscionable conduct.” The company also failed to convince the court that Google Play should be required to carry the Epic Games Store.

Epic Games has sued Apple and Google in not only Australia but also several other jurisdictions. In the U.S., two recent court rulings required the tech giants to change some of the business policies at the center of the litigation. In response, Epic Games recently returned its popular Fortnite game to the App Store and Google Play. The company today announced plans to take the same step in Australia.

“The Epic Games Store and Fortnite will come to iOS in Australia,” Epic Games stated in a post on X today. 

The two class-action lawsuits covered by today’s ruling represent 15 million consumers and 150,000 app developers. According to the complaints, Apple and Google unnecessarily increased in-app content prices from November 2017 to June 2022. Today’s ruling will allow the plaintiffs to seek damages from the companies.

The sum that Apple and Google may be required to pay will be determined in a future hearing. According to the Australian Broadcasting Corporation, the damages are expected to be “in the hundreds of millions” of Australian dollars.

Google stated in response to the ruling that “we disagree with the court’s characterisation of our billing policies and practices, as well as its findings regarding some of our historical partnerships, which were all shaped in a fiercely competitive mobile landscape.”

“We welcome the Australian court’s rejection of some of Epic’s claims, however, we strongly disagree with the court’s ruling on others,” Apple said in a statement of its own. “Apple faces fierce competition in every market where we operate.”

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