Apple and Google misused market power to monopolise app stores

On 12 August 2025, Justice Beach of the Federal Court of Australia (Court) delivered four (4) landmark judgments.  The decisions of Epic Games, Inc & Anor v Apple Inc & Anor (EG v Apple) and Epic Games, Inc & Anor v Google LLC & Ors (EG v Google), together the (EG Cases), alongside Anthony & Anor v Apple Inc & Anor and McDonald v Google LLC & Ors, together (Class Actions), mark a significant development in the technology and competition law landscapes.

Epic Games v Apple and Google

The decisions from the EG Cases, a partial success for game and software developer company Epic Games (EG), found Apple and Google liable for misuse of market power under section 46 of the Competition and Consumer Act 2010 (Cth)(CCA).

The EG Cases are the first contested application of the new misuse of market power provisions introduced in 2017 and directly address the complex issues of “walled gardens” created by technical and contractual restrictions within mobile device ecosystems.

Background to the misuse of market power cases

EG, the developer of the popular video game Fortnite, initiated proceedings in Australia in November 2020 against Apple and March 2021 against Google.

The disputes escalated in August 2020 when EG introduced its own direct payment processing system within Fortnite, bypassing the proprietary payment systems of Apple’s App Store (Apple Store) and Google’s Play Store (Google Store), together(App Stores).

In response, both Apple and Google removed Fortnite from their App Stores for breaching their terms and conditions, prompting EG to commence legal action globally, including in Australia.

EG alleged that Apple and Google engaged in anti-competitive and unconscionable conduct concerning the distribution of mobile apps and in-app payments.

Specifically, EG contended that both companies wielded substantial market power over app distribution and in-app payment processing on their respective platforms, namely iOS and Android.

Allegations against Google and Apple

The key allegations made by EG included:^[1]

• Misuse of market power pursuant to section 46 of the CCA:  Apple and Google required all apps to be distributed solely through their own app stores, mandating exclusive use of their proprietary in-app payment systems, charging a thirty (30) percent (%) commission, and blocking alternative app stores and payment processors to reduce competition.
• Exclusive dealing pursuant to section 47 of the CCA:  access to app stores was conditional on using their own payment systems and that developers were contractually barred from distributing apps outside the app stores, as well as being prevented from offering or advertising alternative payment options within apps.
• Anti-competitive contracts and arrangements pursuant to section 45 of the CCA:  standard form, non-negotiable contracts imposed on developers contained provisions that substantially lessened competition, such as bans on competing app stores and restrictions on alternative in-app payment solutions.
• Unconscionable conduct pursuant to section 21 of theAustralian Consumer Law:  imposition of non-negotiable agreements, lack of developer bargaining power, and enforcement of terms not reasonably necessary to protect legitimate business interests.

EG sought the following orders from the Court:

• declarations that Apple and Google contravened the listed provisions;
• injunctions to prohibit the contravening conduct from continuing;
• orders specifically permitting third-party app stores and alternative payment processors on iOS and Android platforms; and
• the award of damages for loss suffered by EG due to the contravening conduct.

The Federal Court’s findings

While the full 952-page judgment against Apple and 914-page judgment against Google are embargoed pending confidentiality orders, key findings in the oral summary referred to in the Court Orders are illustrative of what the final judgements will include.

Justice Beach upheld key parts of EG’s claims, finding that the tech giants breached Australian competition laws.

EG v Apple^[2]

• The Court found two (2) relevant markets: the iOS App Distribution Market and the iOS In-App Payment Processing Market.  Justice Beach concluded that while alternatives existed, they were not a sufficient constraint to detract from these market definitions.  Apple was found to have a substantial degree of power in both markets at all relevant times, essentially acting as a monopoly provider.
• The Court found that Apple misused its market power by engaging in conduct that had the purpose, effect, or likely effect of substantially lessening competition in the iOS App Distribution Market.  In the iOS In-App Payment Processing Market, Apple’s conduct was found to have the effect or likely effect of substantially lessening competition. 
• Apple’s asserted a  security rationale for the restrictions was required but did not negate the anti-competitive purpose or effect.  The Court noted that alternative payment methods were permitted for the purchase of physical goods in apps without security issues.
• The Court did not accept EG’s other claims under s47 (exclusive dealing), s45 (anti-competitive agreements), or unconscionable conduct allegations against Apple.

EG v Google^[3]

• The Court found three (3) relevant markets:
• the Mobile Operating System Licensing Market to Original Equipment Manufacturers;
• the Android App Distribution Market, and the
• Android In-App Payment Solutions Market. 
• Google was found to have a substantial degree of power in all three (3) markets at all relevant times.
• Google was found to have misused its market power in the Android App Distribution Market and the Android In-App Payment Solutions Market.  Its conduct in these markets had the purpose, effect, or likely effect of substantially lessening competition.
• Google’s “Project Hug” initiative, which involved payments to developers to discourage them from opening competing stores, was specifically found to have the purpose of substantially lessening competition.
• Similar to the findings against Apple, the Court did not accept EG’s claims of exclusive dealing, anti-competitive agreements, or unconscionable conduct allegations against Google.

Class actions

The Court found in favour of the applicants in the related class actions,^[4] concluding that Apple and Google had caused developers to pay materially higher commissions than they would have in a competitive market.

Further hearings will be required to determine the precise extent of any overcharge and calculate damages.

Global context

The Australian proceedings are part of a broader, global campaign by EG to challenge the app store practices of Apple and Google.

Notable developments in other jurisdictions include:

• United States:  US courts found Apple’s anti-steering rules unlawful under California law, requiring it to allow developers to link to external payment methods.  A jury found Google guilty of maintaining an illegal monopoly over Android app distribution and in-app payments, with its appeal rejected in July 2025.^[5]
• European Union:  The Digital Markets Act 2022 (EU), fully in force since March 2024, mandates ‘gatekeeper’ platforms like Apple and Google to allow alternative app stores and payment systems.  Consequentially, Google was found to have abused its dominant position on the market.^[6]
• Other jurisdictions:  Litigation is ongoing in the United Kingdom.^[7]

Next steps

While Apple welcomed the rejection of some claims, it expressed strong disagreement with the Court’s ruling on others, and Google stated it would review the judgment, disagreeing with the characterisation of its billing policies and historical partnerships.

Further hearings will be set to determine the appropriate relief, including injunctions and damages.

Both Apple and Google have the option to appeal the decision to the Full Court of the Federal Court of Australia within twenty-eight (28) days, which will lapse on 10 September 2025.

The publication of the Court’s detailed written reasons is highly anticipated, as the decision will be instrumental in understanding the trajectory of Australia’s software competition laws.

Links and further references

Commonwealth Courts Portal links

Epic Games, Inc & Anor v Apple Inc & Anor(NSD 1236/2020)

Epic Games, Inc & Ors v Google LLC & Ors (NSD 190/2021)

Anthony & Anor v Apple Inc & Anor (VID 341/2022)

McDonald v Google LLC & Ors (VID 342/2022)

Published orders

Epic Games, Inc & Anor v Apple Inc & Anor (NSD 1236/2020)

Epic Games, Inc & Ors v Google LLC & Ors (NSD 190/2021)

Anthony & Anor v Apple Inc & Anor (VID 341/2022)

McDonald v Google LLC & Ors (VID 342/2022)

International cases

Epic Games, Inc. v Google LLC (No 24‑6256) 9th Cir, ND Cal (31 July 2025) (US)

Judgment of the General Court, Google and Alphabet v European Commission (‘Google Android’) (T-604/18, EU:T:2022:541) (14 September 2022) (EU)

Epic Games, Inc and others v Alphabet Inc, Google LLC and others (No:1408/7/7/22) Competition Appeal Tribunal (UK)

Further information

If you need advice on the implications of technology on competition laws for your business, contact us for a confidential and obligation-free discussion:

Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

[1] Epic Games, Inc & Ors v Google LLC & Ors (Concise Statement, Federal Court of Australia, New South Wales Registry, NSD 190/2021, 10 March 2021).

[2] Epic Games, Inc & Anor v Apple Inc & Anor (Order, Beach J, Federal Court of Australia, New South Wales, NSD 1236/2020, 12 August 2025).

[3] Epic Games, Inc & Ors v Google LLC & Ors (Order, Beach J, Federal Court of Australia, New South Wales, NSD 190/2021, 12 August 2025).

[4] Anthony & Anor v Apple Inc & Anor (VID341/2022); McDonald v Google LLC & Ors (VID 342/2022).

[5] Epic Games, Inc. v Google LLC (No 24‑6256) 9th Cir, ND Cal (31 July 2025).

[6] Judgment of the General Court, Google and Alphabet v European Commission (Google Android) (T-604/18, EU:T:2022:541) (14 September 2022).

[7] Epic Games, Inc and others v Alphabet Inc, Google LLC and others (No:1408/7/7/22, Case Management Conference Transcript) UK Competition Appeal Tribunal (7 October 2024).

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