Apple loses bid to halt Australian case

Apple has lost a High Court bid to rule on a decision that keeps a monopoly case on Australian soil.
Camera IconApple has lost a High Court bid to rule on a decision that keeps a monopoly case on Australian soil. Credit: AAP

Tech giant Apple has lost a bid to prevent a case being heard in Australia that alleges it misused its market power over a popular online game.

The High Court in Canberra on Thursday refused Apple special leave to appeal against a Federal Court judgment that prevented the American multinational corporation from staying Epic Games’ litigation in Australian courts.

Apple had pointed to its contract with Epic Games dictating disputes must first be filed in California.

The Federal Court in Sydney initially granted Apple a temporary stay requiring the game developer to file the case in the United States. But in July a full bench of that court overturned the stay ruling.

Epic, which makes the Fortnite game, had argued the decision could have a “chilling effect” on competition in Australia by signalling companies could avoid local laws with court selection contract clauses.

The full Federal Court agreed, saying there were strong reasons not to grant the stay because enforcing the exclusive jurisdiction clause “would offend” Australian public policy.

The proceeding involves “fundamental public interest issues in relation to conduct undertaken in an Australian sub-market” and an Australian company - Apple Pty Ltd - which wasn’t a subsidiary party to the exclusive jurisdiction contractual clause.

The competition regulator intervened in the Federal Court appeal, arguing cases dealing with conduct that impacts on Australian markets and Australian consumers should be heard in Australia by Australian courts.

The Australian Competition and Consumer Commission chair Rod Sims said in July the case “raises important issues for competition in the digital marketplace”.

Apple had submitted the Federal Court was a “clearly inappropriate forum” for a dispute between two large, successful, US companies that could be determined by the Californian court.

In the primary case, Epic alleges Apple and its Australian subsidiary breached Australian laws forbidding exclusive dealing, the misuse of market power and unconscionable conduct.

Epic also filed a separate case against Google in March, claiming it inflates the price of apps and in-app content for millions of Android users in Australia.

Fortnite was banned from the App Store and Google Play Store after the multi-billion-dollar developer allowed users to pay it directly for in-app content, bypassing the in-app payment systems that deliver Apple and Google significant commissions.

Unlike Google, Apple prevents iOS users from downloading apps from anywhere but its app store.

Apple says its priorities always were to provide customers with a safe and trusted place to download software and to apply the rules equally to all developers.

In refusing Apple’s application, the High Court awarded costs against it.

Get the latest news from thewest.com.au in your inbox.

Sign up for our emails