After already suing Apple in the US, Epic Games has now began legal proceedings against the tech giant in Australia as well.
Apple vs Epic Games: Australian Edition
Epic is claiming that Apple’s refusal to allow alternative payment options on its platforms, such as the App Store, is a breach of Australian consumer law.
“This is much bigger than Epic versus Apple – it goes to the heart of whether consumers and creators can do business together directly on mobile platforms or are forced to use monopoly channels against wishes and interests,” Epic founder and CEO, Tim Sweeney, said in a statement.
“Apple were pioneers of the personal computer, and [its] original products were open platforms. Anyone could write code, anyone could release software and users could install software from sources of their choosing. Today’s digital platforms must be similarly open to fair competition.”
This complaint comes off the back of a similar argument that Epic has made in the US. It takes issue with the 30 per cent cut that Apple takes on all App Store purchases while also simultaneously disallowing alternative payments.
In response Apple has reiterated the stance it has publicly stated over the past few months — one that gratuitously avoids the mention of money. According to Apple, App Store policy is there for customer safety and Epic’s payment model was not approved. It also goes after Epic’s actions rather strongly.
“For twelve years, the App Store has helped developers turn their brightest ideas into apps that change the world. Our priorities have always been to provide customers with a safe and trusted place to download software and to apply the rules equally to all developers,” Apple said in a statement to Gizmodo Australia,
“Epic has been one of the most successful developers on the App Store, growing into a multibillion dollar business that reaches millions of iOS customers around the world, including Australia. In ways a judge has described as deceptive and clandestine, Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines that apply equally to every developer and protect customers. Their reckless behaviour made pawns of customers, and we look forward to making this clear to Australian courts.”
The Apple Tax
Epic’s issues with Apple is certainly nothing new, particularly the 30 per cent App Store cut.
Widely known as the Apple Tax, this it is something that several companies have complained about over the past few years — including Spotify and Basecamp. This has resulted in an antitrust investigation in Europe and the US Department of Justice is also reportedly looking into an antitrust probe of Apple regarding its in-app purchase policy.
Back in September Australia also joined the party. The Australian Competition and Consumer Commission (ACCC) announced it was looking into both Apple and Google’s app store practices. This includes the competition offered by Google Play and the App Store.
“We want to know more about the market for mobile apps in Australia, including how transparent and effective the market is, for consumers as well as those operating in the market. We will also focus on the extent of competition between the major online app stores, and how they compete for app sales with other app providers,” the ACCC said in a statement at the time.
In regards to the Apple and Epic legalities in Australia, the ACCC has also confirmed with Gizmodo Australia that it is “taking great interest in this important case.”
“This will be a significant test of the revised Section 46 of the Competition and Consumer Act, which prohibits companies misusing market power,” an ACCC spokesperson said in an email to Gizmodo Australia.
“We are closely examining competition and consumer issues with app stores as part of our Digital platform services inquiry. Our report is due at the end of March next year, and this case will be relevant to our thinking.”
How did we get here?
This local legal drama is just the latest chapter in a lengthy battle between Epic and Apple that has been unfolding over the past few months.
This was the result of Epic Games enabling players to purchase Fortnite’s in-game currency directly from the mobile apps on iOS and Android. This meant skipping the regular in-app payment method that Apple gets a 30 per cent cut of. Epic further enticed players to pay directly by offering a 20 per cent discount on this payment method.
Epic quickly filed a lawsuit against Apple for “anti-competitive restrictions”.
Apple also threatened to terminate Epic’s developer accounts and remove access to software developer tools such as Unreal Engine. This posed a huge problem as Epic offers Unreal Engine to third party developers on iOS and MacOS and forced Epic to update its court filing. If blocked from the Apple ecosystem it wouldn’t be able to be used by developers for cross platform development of apps and games.
Fortunately for Epic, US District Judge Yvonne Gonzalez Rogers prevented Apple from taking this step.
So far there have been two US hearings regarding the Apple and Epic case. After both parties made their arguments the judge recommended the case go to a jury trial in July 2021. However, she also ruled that Fortnite will not be allowed back on the App Store yet.
It is currently unclear when an initial hearing will take place in Australia.
This story has been updated to include statements from Apple Australia and the ACCC.
Disclosure: the author owns 12 shares in Apple.