Epic Games takes Apple dispute to Australian market regulator

Credit: Epic Games

Epic Games has taken its App Store legal dispute with Apple in Australia to the country's market regulator, according to a new report.

The "Fortnite" maker has told the Australian Competition and Consumer Commission that Apple's "unrestrained market power" is suppressing competition and innovation, and is artificially raising the price of iPhone and iPad apps, Financial Review reported on Thursday.

According to its submission to the ACCC Digital Platforms Services Inquiry, Epic Games says that Apple is forcing App Store developers to pay a 30% "Apple tax" on the games they sell. It adds that the true commission should be closer to the single digits.

"Apple's conduct is symptomatic of unrestrained market power that results in significant harm to Australian consumers and the competitive process. In the absence of these anticompetitive restraints, app developers would have a greater ability to distribute their apps, leading to increased competition and innovation to the benefit of Australian consumers," Epic's submission reads.

The ACCC was already investigating whether Apple and Google abuse their power in their respective app stores. Epic Games had previously praised the ACCC for investigating App Store market power.

Epic Games sued Apple in Australia's Federal Court in 2020, alleging that the App Store breached multiple sections of the Competition and Consumer Act and the Australian Consumer Law.

That lawsuit claimed that Apple illegally "forces Epic (and other app developers) to only use Apple's App Store to distribute its software applications to the broad base of iOS device users, and to only use Apple's payment platform for purchases of their in-app content by iOS device users."

Apple in December 2020 asked the Australia Federal Court to toss out the lawsuit because Epic Games had promised to settle any disputes and litigation in the U.S.

Epic Games launched its campaign against Apple in 2020, after baiting the company into removing "Fortnite" from the App Store with the implementation of a direct payment system that bypassed Apple's own. That payment system was a violation of Apple's App Store guidelines.

The initial litigation, filed in the U.S. in 2020, is still ongoing. Earlier in February, a judge ruled that Apple CEO Tim Cook must undertake a seven-hour deposition in the case, which is slated to go to trial in May.

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22 Comments

entropys

said about 3 years ago

Epic doesn’t like the story of the little red hen

sdw2001

said about 3 years ago

As much as I am deeply concerned about the power of Big Tech (the recent actions of FB, Twitter, AWS, Google and Apple stand out), I continue to think Epic doesn’t have a leg to stand on here. The developer clearly and intentionally violated the terms of service to make a point. As the article stated, they baited Apple into taking the action they did. I don’t see how they are going to make a credible argument that Apple’s system has “driven up prices.“ Apple does not have a monopoly on smart phones. They are a major market player and they have their own system. If you want to use their system, you’re going to play by their rules. They will claim, with quite a bit of credibility, that their system protects users, overall quality, and has led to a massive number of relatively low cost apps. Is the developer actually going to argue that they have a *right* to have their software installed on Apple’s product? Like it’s some kind of public service or common carrier? That argument has a lot more merit for the social media companies, and we’re not even there yet with them. I continue to believe this is going nowhere for Epic.

darkvader

said about 3 years ago

sdw2001 said:

As much as I am deeply concerned about the power of Big Tech (the recent actions of FB, Twitter, AWS, Google and Apple stand out), I continue to think Epic doesn’t have a leg to stand on here. The developer clearly and intentionally violated the terms of service to make a point. As the article stated, they baited Apple into taking the action they did. I don’t see how they are going to make a credible argument that Apple’s system has “driven up prices.“ Apple does not have a monopoly on smart phones. They are a major market player and they have their own system. If you want to use their system, you’re going to play by their rules. They will claim, with quite a bit of credibility, that their system protects users, overall quality, and has led to a massive number of relatively low cost apps. Is the developer actually going to argue that they have a *right* to have their software installed on Apple’s product? Like it’s some kind of public service or common carrier? That argument has a lot more merit for the social media companies, and we’re not even there yet with them. I continue to believe this is going nowhere for Epic.

Apple absolutely has a monopoly in a major segment of the market.

And it's not Apple's iPhone, it's MY iPhone. All Apple needs to do is add a preference to allow installing apps from any source of my choosing. They can put whatever dire warning on it that they'd like, they just don't have the right to keep me from flipping that switch.

Epic are doing this for their own greedy reasons, but they are still heroes for doing it.

mattinoz

said about 3 years ago

I think 2 points don't help their case.

The Big banks with all the political connection they have lost repeatedly trying to get Apple to open access to NFC hardware to run their own card systems on the iPhone.

ACCC backed Apple on the security of customer data.

There is consumer action pending with the ACCC over Epic et al Loot crate business model as being gambling aimed at underage consumers.

So Epic need to prove their anti-consumer business model warrants a reduction of consumer protection to a body whose mandate is to improve both those things.

entropys

said about 3 years ago

darkvader said:

sdw2001 said:

As much as I am deeply concerned about the power of Big Tech (the recent actions of FB, Twitter, AWS, Google and Apple stand out), I continue to think Epic doesn’t have a leg to stand on here. The developer clearly and intentionally violated the terms of service to make a point. As the article stated, they baited Apple into taking the action they did. I don’t see how they are going to make a credible argument that Apple’s system has “driven up prices.“ Apple does not have a monopoly on smart phones. They are a major market player and they have their own system. If you want to use their system, you’re going to play by their rules. They will claim, with quite a bit of credibility, that their system protects users, overall quality, and has led to a massive number of relatively low cost apps. Is the developer actually going to argue that they have a *right* to have their software installed on Apple’s product? Like it’s some kind of public service or common carrier? That argument has a lot more merit for the social media companies, and we’re not even there yet with them. I continue to believe this is going nowhere for Epic.

Apple absolutely has a monopoly in a major segment of the market.

And it's not Apple's iPhone, it's MY iPhone. All Apple needs to do is add a preference to allow installing apps from any source of my choosing. They can put whatever dire warning on it that they'd like, they just don't have the right to keep me from flipping that switch.

Epic are doing this for their own greedy reasons, but they are still heroes for doing it.

Perhaps you could explain the bit where Apple has a monopoly? It has less than 20% of the phone market.
To do what you want the easiest way is you could buy a phone using the operating system with the largest market share which does it fact allow what you want.