Report from the Australian Broadcasting Corporation
In Brief – Judge Jonathan Beach of the Federal Court of Australia has found the Apple and Google app stores to be uncompetitive, delivering a win to giant app developer Epic Games in its effort to force the two companies to open app downloads to competitors and lower their fees. Judge Beach found that the two mobile ecosystem giants had contravened section 46 of Australia’s Competition and Consumer Act for app downloads and in-app payment processing services. The ruling applies to Epic’s lawsuits aimed at gaining access for their own app store on both platforms, as well as two consumer class action lawsuits covering app developers and consumers, which will proceed to damages hearings. Beach directly rejected Apple’s arguments that its efforts to provide a safer mobile ecosystem legally justified the anticompetitive effects, even if they did help improve user security.
Context – The first big result in Epic’s global lobbying and litigation campaign to force down Apple and Google fees was in US federal court and saw Apple prevail on all the federal antitrust charges. Since then, things have been going the other way. Google lost in US court despite its ecosystem being much more open to third-party apps than Apple’s, something confirmed in the Australia ruling. A complicated regime of Android rules, contracts, and revenue-sharing deals proved hugely problematic. The resulting court order forcing Google to make significant changes to its US Play Store is still being appealed, but it has not been going well. Although Epic only prevailed over Apple on a single complaint involving California’s Unfair Competition Law, they eventually won an injunction forcing Apple to open its US App Store and no longer charge commissions on apps from other stores. Five years on, both companies are facing similar demands to open app distribution and lower fees in Europe, Japan, South Korea and India, and with each new result, officials watching from other jurisdictions have cover to act. Everywhere, the fact that the Android and Apple ecosystems robustly compete with each other has proven nearly meaningless.