Tech giants Apple and Google have been found to have engaged in anti-competitive conduct, paving the way for a payout that could be worth hundreds of millions of dollars.
Epic Games, the developer of popular online game Fortnite, sued the two tech giants in the Federal Court, claiming they engaged in anti-competitive and unconscionable conduct against those developing apps distributed through iOS and Android devices.
The lawsuit was launched after Epic was booted from Apple's App Store and Google's Play Store after attempting to introduce its own payment system into Fortnite games in August 2020.
On Tuesday, Justice Jonathan Beach found Apple and Google had breached Australia's competition laws, upholding key elements of Epic's case.
Apple had a "substantial degree of market power" because of the restrictions placed on in-app payment systems and the distribution of iOS-compatible apps, he said.
Justice Jonathan Beach said Apple had a "substantial degree of market power" because of the restrictions placed on in-app payment systems and the distribution of iOS-compatible apps. Source: AAP / AP/Patrick Semansky
The tech companies' dominance had the effect of substantially lessening competition and breached Australia's competition laws, Beach found.
However, he rejected Epic's argument Apple had engaged in unconscionable conduct.
Beach also found in favour of a class action lawsuit comprising Australian developers and gamers who claimed Apple and Google's monopolistic practices led to inflated prices.
The app developers had to pay higher commissions than they otherwise would have if there were more competition in the market.
Lawyers for the plaintiffs welcomed the result as a significant win for consumer rights and digital fairness that could have global implications for how digital platforms operate.
Epic Games is the developer of popular online game Fortnite. Source: AAP / Bianca de Marchi
The lawyers said the decision could result in "one of the largest class action payouts in Australian legal history with potential compensation of several hundreds of millions of dollars to come from two global corporate Goliaths".
The parties have been given time to consider the 2,000-page judgment and will return to the Federal Court at a later date to determine compensation and directives aimed at increasing transparency.
A Google spokesperson said the company disagreed with the court's characterisation of its billing policies and practices and would review the full decision.
A Google spokesperson said the company disagreed with the court's characterisation of its billing policies and pratices. Source: Getty / NurPhoto
Epic Games took to social media to herald the result and say Fortnite would return to iOS soon.
"A federal judge just found that Apple and Google both engaged in anti-competitive conduct," the company wrote.
"Another HUGE Win for Epic Games!"
Epic won a separate US case against Google in 2023 after a jury found it had engaged in anti-trust conduct through the Google Play Store.
It was less successful in its case against Apple, although the court found the tech giant had engaged in anti-competitive conduct.
Apple has also been forced to implement changes to its App Store in Europe, including allowing third-party payment systems.
