An Australian federal judge has ordered Apple to make sweeping changes to its App Store rules following a years-long antitrust battle with Epic Games. Apple has confirmed that it plans to appeal. Here are the details.
Epic scores major victory in Australia
Apple must allow iPhone users with Australian Apple Accounts to install apps from third-party app stores and websites starting March 1, 2027, a federal judge ordered today in a 235-page decision. Apple has until February 15 to request an extension until May 3, 2027, subject to court approval.
Today’s order follows a ruling last year that Apple violated Australian competition law by restricting alternative app distribution and payment methods, in a lawsuit brought by Epic Games similar to its long-running legal battle with Apple in the US.
In his decision, Justice Jonathan Beach said Apple held “a substantial degree of power in the iOS app distribution services market and the iOS in-app payment solutions market,” and used its developer agreements and App Store guidelines to restrict competition.
Among the practices singled out by the judge were:
- Blocking app downloads and installations outside the App Store
- Preventing developers from distributing apps through alternative channels
- Requiring developers to use Apple’s in-app payment system
- Prohibiting links to alternative payment methods
- Requiring developers to offer content purchased elsewhere through Apple’s in-app purchase system as well.
- Preventing developers from handling refunds directly
The ruling also cited Apple’s actions against Epic Games in 2020, including its refusal to allow Epic Direct Pay, Fortnite’s removal from the App Store, and the subsequent termination of Epic’s developer account.
Justice Beach described the latter two actions as “a paradigm example of Apple’s enforcement of its restrictive terms, in contravention of” section 46 of Australia’s Competition and Consumer Act 2010, which prohibits corporations with substantial market power from engaging in conduct that has “the purpose, or has or is likely to have the effect, of substantially lessening competition” in that market.
As a result, Justice Beach issued a wide-ranging series of orders requiring Apple to, among other things:
- Allow alternative app stores and sideloading: Let Australian iPhone users download and install apps directly from websites and third-party marketplaces.
- Allow alternative payment methods: Let developers use payment systems other than Apple’s, including within apps distributed through the App Store.
- Permit external payment links: Allow developers to direct users to alternative payment methods from within their apps.
- Provide access to developer tools: Make the APIs and tools necessary for alternative app distribution available on substantially the same terms as those offered to App Store developers.
- Restrict fees and other barriers: Prohibit fees for accessing alternative distribution channels, limit certain fees on external payments, and allow developers to offer lower prices outside Apple’s payment system.
- Readmit Epic Games’ apps: Allow Fortnite and other eligible Epic Games apps back onto the Australian App Store, subject to compliance with applicable developer rules. (Importantly, this specific order is not subject to the March 2027 deadline, but rather takes effect immediately, with Apple required to act upon receiving a written application from Epic.)
The decision also addresses several other aspects of Apple’s App Store policies, including restrictions on its ability to turn off apps installed outside the App Store and requirements related to notarization.
The court also prohibited Apple from requiring developers to report transactions processed through alternative payment providers or offer Apple’s payment system alongside their preferred alternatives, both of which are requirements the company imposes in other regions, including Brazil and Japan.
When it comes to Apple’s wins in the decision, the list is much slimmer. Judge Beach rejected Epic’s request to extend the court’s injunctions worldwide and allowed Apple to maintain security scanning and notarization requirements for apps distributed outside the App Store. And while Apple must permit competing app marketplaces on iOS, it is not required to distribute them through its own App Store. This is a distinction he had already established in last year’s ruling.
Finally, the court ordered Apple to pay 85% of Epic’s legal costs incurred through the original trial, while reserving a decision on costs associated with the subsequent hearings over remedies.
Commenting on the decision, Epic confirmed “Fortnite is coming back to the App Store in Australia tomorrow,” and celebrated it as “great news for developers worldwide and iOS users in Australia who will benefit from an open mobile app ecosystem.”
In a statement to Reuters, Apple said:
“We will request a stay and appeal the outcome to seek a resolution that respects our intellectual property and protects the safe, secure experience that consumers and developers expect from the App Store.”
To read the full decision, follow this link.
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