Australia: Apple and Google sentenced for competition law infringements

Even though Apple has repeatedly expressed its irritation at Europe's approach to regulating tech companies, the iPhone manufacturer also faces interference in its business policy in other parts of the world. In Australia, a court has now convicted Apple and its competitor Google of market abuse. The laughing third party is games manufacturer Epic Games. Tim Sweeney's company has announced that it will soon be launching its alternative app store in Australia. The company announced this on X. So far, this store only exists in the European Union.

However, the decision by a federal court could have even more serious consequences for the publishers of the iOS and Android smartphone operating systems. Millions of consumers and developers can now claim damages amounting to several hundred million dollars. In his ruling, Judge Jonathan Beach found that both tech companies had breached section 46 of the Australian Competition and Consumer Act by abusing their market power to restrict competition. The decision paves the way for class action lawsuits representing 15 million consumers and 150,000 app developers.

Legal dispute began in 2020

The lawsuits, led by law firms Phi Finney McDonald and Maurice Blackburn and Fortnite developer Epic Games, accused Apple and Google of operating illegal monopolies in app sales. By banning or severely restricting alternative stores and websites, both companies had forced developers to use their payment platforms, which retained between 15 and 30 percent of sales revenue as fees. The legal dispute began in 2020 when Fortnite was removed from the Google and Apple app stores after Epic Games introduced its own in-app payment system to circumvent the tech giants' commissions.

While Apple operates its App Store system as a closed ecosystem, Google takes a more open approach with Android. Users can theoretically use multiple app stores and download apps directly from websites. Nevertheless, the court found that Google acted in a similarly anti-competitive manner through restrictive contracts and control over the Android ecosystem.

Security does not invalidate the competitive disadvantages

Judge Beach also rejected Apple's argument that the restrictions in iOS were solely for security concerns: "The fact that Apple introduced this central app distribution system to protect security does not mean that there is not also a significant anti-competitive purpose", the Australian television station ABC quoted him as saying.

A representative of the plaintiffs estimates the potential compensation payments at "probably hundreds of millions of dollars". The exact amount will be determined in a separate hearing. Consumer advocates and lawyers expect that the ruling could have a significant impact on the operation of digital platforms in Australia, with possible consequences such as lower prices, increased competition and more innovation. In addition, Australia has been discussing tighter regulation of tech companies for some time.

In a statement to the Australian ABC, Apple said that the company welcomed the Australian court's rejection of some of Epic's allegations. However, Apple does not agree at all with the court's decision on other claims.

(mki)