Apple loses bid to avoid Epic court battle in Australia

Apple looks set to go to the High Court after Fortnite game maker Epic won the right to have a key dispute heard in Australia.

Fortnite game maker Epic accuses Apple of abuse of market power by charging 30 per cent of all money made on mobile apps and not allowing game suppliers to provide their own payments services. Picture: AFP

Apple has lost its attempt to have its legal battle against Fortnite maker Epic Games heard first in the United States, with the Full Federal Court ruling it should be heard in Australia.

Epic accuses Apple of abuse of market power by charging 30 per cent of all money made on mobile apps and not allowing game suppliers to provide their own payments services.

Epic, through court action which in Australia alleges breaches of competition law, aims to break the grip of the iPhone maker on its online marketplace.

It wanted its case against Apple run first in Australia.

Apple wanted it heard first in the US, and now looks set to appeal to the High Court.

Epic Games initially lost its bid to run a parallel case in Australia, but the decision now has been overturned on appeal.

“Epic Games is pleased that our case will proceed with the Federal Court and be examined in the context of Australian laws,” an Epic spokesman said.

“This is a positive step forward for Australian consumers and developers who are entitled to fair access and competitive pricing across mobile app stores.

“We look forward to continuing our fight for increased competition in app distribution and payment processing in Australia and around the world.”

Apple Australia said it disagree with the appeal ruling and planned to appeal.

“The initial decision in April from Australia’s Federal Court correctly ruled that Epic should be held to the agreement it made to resolve disputes in California,” Apple Australia said in a statement. “We respectfully disagree with the ruling made today and plan to appeal.”

The court has also denied Epic’s attempt to use its own collection services on popular games like Fortnite.

Apple and Epic are fighting substantially the same issues in separate US litigation.

At first instance Federal Court judge Justice Nye Perram had suggested that as the case involved US contracts it perhaps should be heard first in the US, even though Epic’s action came under Australian law

But the full court noted “this is a case about the Australian App Store, the developers of apps for distribution in that store and the Australian users of iOS devices.”

“It arises under Part IV (and ACL s 21) (of the Australian Competition law ). It is a case commenced in Australia in reliance on Australian competition law, involving Australian markets and consumers.”

Apple had argued as Epic had first taken the action in the US “the Australian proceedings are prima facie vexatious or oppressive”.

It added “in substance, the dispute between Apple and Epic is an argument between two large,

successful, American companies in respect of issues that can be readily determined by

the US court.”

The substantive case is yet to be decided on its merits and the ruling on Friday related on ly to which courts heard it first - those in Australia, or the US.

Australia’s competition watchdog, the Australian Competition and Consumer Commission, was listed as a friend of the court on Epic’s side, while Google was in a similar position for Apple.

Epic has also filed a complaint against Google, which with Apple control 100 per cent of the Australian mobile app market and which both charge 30 per cent of app revenues.

The big US platforms write all their contracts in the US, so if Epic had lost it would mean any Australian company would have to fight the matter in the US under Australian law.

ACCC actions would be heard in Australia because it is not part of the contract.

ACCC chief Rod Sims welcomed the Full Federal Court ruling “which means that Epic Games’ case against Apple all eging contraventions of Australia competition law will now be heard in Australia, not in the US”.

He said Epic had demonstrated strong public policy reasons for its case, including that the outcome of the proceeding would impact Australian consumers.

“We submitted that there are public policy reasons why Australian competition law cases, which deal with conduct that impacts on Australian markets and Australian consumers, should be heard in Australia by Australian courts, in particular the Federal Court,” he added.

Mr Sims noted the ACCC’s involvement in the case had now ended but added: “We will continue to take a strong interest in this case, which raises important issues for competition in the digital marketplace.”