Epic Games sues Apple for taking Fortnite off the App Store
In November 2020, Epic Games (the gaming company that created the popular game Fortnite), commenced proceedings against Apple, alleging Apple has breached the Competition and Consumer Act 2010 (Cth) (“the Act”). Now, Australia’s consumer watchdog, the ACCC has become involved in the dispute, too.
How did we get here?
Epic Games claim is that Apple breached the Act when it removed Fortnite from the Apple App Store. Apple removed Fortnite from the App Store after Epic enabled a direct payment feature on the Fortnite app, which Apple says is a breach of the in-app billing system for products within video games. This resulted in Apple not receiving a cut of the revenue Epic Games was receiving from in-app purchases.
This all happened within the Australian court system. But, separately, Epic Games also commenced proceedings against Apple in the US (in August 2020) and the trial for those proceedings started on 3 May 2021.
Apple made an application to the Federal Court of Australia seeking a ‘stay’ of the Australian proceedings. On 9 April 2021, a stay was granted. A stay of proceedings means that the case can be stopped, either permanently, indefinitely or until a specific date. Apple applied for a stay order because it said all disputes between Epic and Apple should be determined in the US courts.
Epic then appealed the stay order and the appeal will be heard by the Full Federal Court of Australia on 9 June 2021. This is where the ACCC comes in. The ACCC wants to take part in this appeal to argue against the stay, saying the case was ‘filed in an Australian Court involving Australian consumers and raising significant issues under Australia’s competition laws’.
How can the ACCC get involved in a case?
The ACCC is the commonwealth agency that ‘promotes competition and fair trade in markets to benefit consumers, businesses, and the community’. One of their main roles is to make sure individuals and businesses comply with any laws that regulate competition, fair trading and consumer protection. The ACCC can get involved in legal proceedings in a number of ways, for example the ACCC has the power to commence proceedings (ie. bring someone to court) and also to intervene in private proceedings between two independent parties.
In the Epic v Apple case, the ACCC has applied for leave (permission) from the court to either appear as an amicus curiae or, alternatively, to intervene in the proceedings.
‘Amicus curiae’ is a Latin phrase which translates to ‘friend of the court’. An amicus curiae assists the court on particular issues of law in a given case, but not the whole case. They will not become a party to the proceedings, which means they do not file pleadings or present evidence and cannot appeal the court’s decision.
In the Epic v Apple case, the ACCC has sought leave to appear/assist the court in relation to the issue of whether the proceedings should be stayed. They have not sought to appear in the substantive proceedings (the case about whether Apple has breached the Act).
Intervening in private proceedings
Under section 87CA of the Act, the ACCC can intervene in any proceedings brought under the Act. If this happens, the ACCC ‘is taken to be a party to the proceedings and has all the rights, duties and liabilities of such a party’.
The ACCC has said that it will consider intervening in private proceedings for one or more of these three reasons:
- Significant public interest
In regard to the Epic v Apple case, the ACCC says there are ‘significant public policy issues’ at stake, about which the ACCC believes it can assist the court to reach a determination.
- To clarify the law
If private proceedings relate to a section of the Act that is ambiguous or has not been determined by a court before, for example, the ACCC may decide to step in. ‘The ACCC believes it can provide a perspective that may help a court to see matters in a wider public interest context than could private parties, who may be unable or unwilling to do so.’
- Matters involving international conduct
‘The ACCC has strong links to overseas competition, consumer protection and regulatory communities.’ This means that the ACCC can make informed submissions on topics such as e-commerce and cross-border consumer protection matters. If a matter involves international conduct, the ACCC may choose to intervene.
If you are interested in the ways that the ACCC can get involved in court proceedings, have a read of our article: ACCC commences action against Lorna Jane for misleading consumers about anti-virus activewear.
What will happen next?
We now have to wait for 9 June 2021 to find out whether the stay order will be upheld or overruled. If the stay order is overruled, it means the substantive proceedings brought by Epic in November 2020 will be able to go ahead.
If you are involved in a consumer law dispute, or you are concerned about something that has happened to you as a consumer or supplier of goods/services, get in touch with the expert legal team at Lynn & Brown Lawyers.
This article has been co-authored by Chelsea McNeill and Steven Brown. Chelsea is a Law Graduate from Murdoch University. Steven is a Perth lawyer and director, and has over 20 years’ experience in legal practice and practices in commercial law, dispute resolution and estate planning.