Epic Games launches lawsuit against Apple in Australian court, demanding App Store changes

Consumers could be the winners when the multimillion-dollar court battle between Epic Games and Apple hits Australia.

THE multimillion-dollar court battle between Epic Games and Apple is about to hit Australia, with the makers of Fortnite launching a lawsuit in Federal Court to force major changes to its App Store and the way iPhones work.

And the company’s founder said consumers were likely to be winners if it proved successful, as greater competition and lower commissions could force down the price of iPhone apps and games.

The Australian battle comes just months after the tech behemoths traded blows in the US when Epic Games challenged Apple’s 30 per cent cut of App Store purchases, and briefly snuck its own payment system into its Fortnite app against Apple’s rules.

Consumers are likely to be the winners in the battle between Epic Games and Apple. Picture: Jennifer Dudley-Nicholson

Apple responded by banning new Fortnite downloads from its store, preventing existing users from updating the app, and launching a countersuit.

But Epic Games founder Tim Sweeney told News Corp Australia the company’s legal battle against Apple was about more than winning “a bigger paycheck” and was designed to break the company’s monopoly over developers and force major changes to how apps could be delivered to consumers.

Mr Sweeney said the company chose the NSW Federal Court to launch its new lawsuit, due to Australia’s recent action against big tech firms and lack of political interference.

“Australia has a world-class legal system and a reputation for rule of law and world-class regulatory framework,” he said.

“It’s even more independent-minded than what’s in the United States. Often here there’s a problem that other tech companies have huge teams of lobbyists and are politically very close to the regulatory agencies that oversee them.

“The US has seen a complete lack of antitrust enforcement against the tech industry for two decades.”

Apple argues its platform has helped Epic Games become one of the most successful developers on the App Store. Picture: AFP

Mr Sweeney said Epic Games was not seeking damages but alleging Apple’s policies breached Australian Consumer Law, and it should allow iPhone users to install apps directly from developers’ websites, allow competing payment systems on iPhones, and should host competing app stores.

He said changes the changes would deliver a “level playing field” for developers and cheaper apps for consumers, and wouldn’t happen unless a company with substantial resources sued Apple.

“It’s a vast fight requiring vast resources so Epic is the kind of company you need to fight this, being a business that is not wholly dependent on app platforms,” he said.

“We can afford to fight.”

But in a statement, Apple argued its platform had helped Epic Games become “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”.

And it said Apple’s rules about software applied “equally to all developers,” including those about using Apple’s payment systems.

“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,” the statement read.

“Their reckless behaviour made pawns of customers and we look forward to making this clear to Australian courts.”

Swinburne University digital media senior lecturer Dr Belinda Barnet said Australia was probably chosen as the latest battleground for this fight due to the Australian Competition and Consumer Commission’s investigations into digital platforms.

But she said Epic Games would face a strident defence from Apple, which had long protected its closed software system and promoted it as a way to ensure users’ security and privacy.

“It could make a massive difference to the app industry but they’re taking on the largest company in the world,” Dr Barnet said.

“Apple would probably give money or a concession in their income rather than break that walled garden. I don’t think they’re going to hand over control.”

The lawsuit is likely to attract plenty of attention in Australia, as the ACCC recently identified “app marketplaces” as a focus for forthcoming investigation and regulation.

Earlier this month, ACCC chairman Rod Sims also told the Law Council of Australia that the regulator had “noted the Epic Games proceedings against Apple and Google in the US” in relation to app store regulations.

The US lawsuit between Epic Games and Apple is scheduled to be heard in July next year.

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Originally published as Epic Games launches lawsuit against Apple in Australian court, demanding App Store changes