Epic Games Wins Federal Court Case Against Apple & Google for Misuse of Market Power

On 12 August 2025, the Federal Court of Australia delivered a landmark judgment in the Epic Games v Apple Inc and Epic Games v Google matters. Beach J held that Apple and Google had engaged in a misuse of market power under section 46 of the Competition and Consumer Act 2010 (Cth) (CCA), breaching Australian competition law by restricting developers to their own payment systems and prohibiting alternative app distribution and in-app payment options on their platforms since 2017.

Background: The Fortnite Saga and Market Power Abuse

Epic Games, the creator of the popular game Fortnite, launched proceedings against Apple and Google in 2020 after the app was removed from app stores for offering its own in-app payment facility, bypassing the mandatory 30% commission charged by both tech giants. Epic questioned not just the high commissions, but the broader barriers both companies impose against third-party payment processors and app distribution.

The Judgement

Beach J’s 2,000-page decision, the first instance of contested litigation to consider s 46 in relation to the misuse of market power, held that Apple and Google used their dominant positions to substantially lessen competition through:

1.  Apple’s restrictions on direct downloading or sideloading of native iOS apps and its requirement to use only Apple’s payment systems for app purchases were judged to have the purpose, effect, or likely effect of reducing competition.

2. Google’s Play Store policies similarly forced developers into Google-controlled distribution and payment systems, excluding alternatives that might offer lower fees or better terms.

Importantly, while the court did not accept every argument from Epic, the key findings favour app developers and consumers, thereby opening the market to more competitive payment options and app distribution models in Australia.

No Monetary Damages: Just Systemic Change

In a move lauded by Apple as Robin Hood-esque, Epic Games CEO Tim Sweeney did not pursue compensatory damages. Instead, Epic sought orders compelling Apple and Google to allow third-party in-app payment systems and alternative app distribution channels. This approach signals Epic’s significant commitment to broader industry reform.

So What Next?

Apple and Google have 28 days from 12 August 2025 to appeal the decision. Both companies have publicly expressed strong disagreement with aspects of the judgment, particularly regarding findings of anti-competitive conduct, and are expected to pursue an appeal. In press releases, Apple highlighted its continued investment in app safety and innovation, while Google defended its practices as shaping a competitive mobile landscape.

Key Takeaways for Developers and Consumers

1. Developers can expect new opportunities to offer their own payment solutions and alternative app stores, thereby potentially reducing costs and increasing consumer choice.

2. Consumers may see lower prices and more flexibility in purchasing apps and services, as competition in payment systems increases.

The Federal Court has sent a very clear message; Indeed, even the most powerful corporations must respect competition law and consumer rights. Epic Games’ victory is not just a personal win, but one for the entire app development community and the consumers they serve.

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ABOUT THE AUTHOR

Isabella Tziolis assists as a paralegal in commercial, defamation, employment and general matters and is committed to supporting BlackBay Lawyers mission of delivering exceptional legal services. Her work focuses on assisting in providing comprehensive legal support, conducting extensive research, and offering strategic guidance to clients.

Isabella is currently studying a Bachelor of Laws and a Bachelor of Arts, majoring in Politics and International Relations at the University of New South Wales. Her academic and professional experience has fostered her high attention to detail and strong analytical skills which allows her to efficiently handle high-pressure situations and contribute to effective legal strategies.