The Australian Federal Court has ruled that Apple and Google breached competition laws by restricting app distribution and payment systems, following a lawsuit by Epic Games, maker of Fortnite.

Epic Games, based in the US, sued after its app was removed from both companies’ stores in 2020 for introducing its own payment method.

Justice Jonathan Beach found Apple held “substantial” market power over iOS apps and in-app payments, while Google was the main supplier of Android apps.

The court determined these actions significantly lessened competition, impacting developers and consumers, and upheld key elements of Epic’s case.

A class action representing Australian app developers and gamers was also successful, with potential compensation of several hundred million dollars.

The court rejected Epic’s claim that Apple engaged in unconscionable conduct.

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🔗 Source: Smart Company

🧠 Food for thought

1️⃣ Australian ruling continues global momentum against app store duopoly practices

This decision represents the latest in a series of successful challenges to Apple and Google’s app distribution control across multiple jurisdictions.

The European Commission has imposed $9.5 billion in antitrust fines against Google since 2017, including a record €4.34 billion penalty in 2018 for forcing Android device manufacturers to pre-install its apps, similar to the practices challenged in this Australian case12.

Epic Games has been systematically challenging both companies worldwide, winning a separate antitrust case against Google in the US in 2023 while achieving mixed results against Apple in American courts.

This suggests that regulatory authorities globally are increasingly willing to challenge the app store practices that have historically generated enormous profits for both companies.

Apple has already been compelled to implement changes in Europe, including allowing third-party payment systems. This demonstrates that sustained legal pressure can force operational changes even from the most powerful tech companies.

2️⃣ Potential compensation reflects small fraction of massive duopoly market

The “hundreds of millions” in potential damages, while substantial, represents a tiny fraction of the mobile app distribution market that Apple and Google dominate.

The global mobile app distribution market was valued at $407 billion in 2024 and is projected to reach $1.09 trillion by 2033, highlighting the enormous revenue streams at stake3.

This market remains highly concentrated among major players, with Apple and Google controlling the primary distribution channels for the world’s dominant mobile operating systems4.

The relatively modest financial penalty compared to market size suggests that even successful legal challenges may not significantly deter anti-competitive behavior if the underlying market structure remains unchanged.

The case demonstrates how regulatory action often focuses on compensation for past harm rather than structural changes that would fundamentally alter the competitive landscape.

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