close button

Legal Reasoning Behind Epic Games, Inc v Apple Inc

For those interested in the legal reasoning of the Federal Court, the primary judge’s decision was overturned due to three errors, each of which would have been sufficient to vitiate the original decision.

Error 1: Public policy considerations

The primary judge did not make a cumulative assessment of the public policy considerations.

The considerations in favour of the proceedings being moved to California included:

  • minimising the possibility of divergent findings;
  • holding contractual parties accountable to the terms of the contract;
  • avoiding multiple international cases giving rise to potentially conflicting findings of fact.

On the other hand, in favour of the proceedings staying under the Federal Court’s jurisdiction:

  • there are public policy considerations arising from the scope and purpose of the CCA and the jurisdiction granted to the Federal Court and the specialist judges there which prevents the risk that Australian law would be misconstrued in foreign courts;
  • certain remedies under the platform provisions (ss 83 and 87(1A) of the CCA) are only available in respect of findings made by Australian courts;
  • the ACCC has statutory rights to intervene in Australian proceedings;
  • an Australian case will contribute to further Australian jurisprudence;
  • the proceedings will impact Australian consumers;

On the balance, the Court considered that public policy considerations were in favour of the proceedings continuing under the Federal Court’s jurisdiction and there were strong reasons to refuse the grant of stay. 

Interestingly, the Court did not consider it was sufficient to rely on the ACCC’s right to bring such action in Australia free of contractual restraint nor did the risk of fragmentation of litigation raise an issue of public policy.

Error 2: The disadvantage to Epic in proceeding in the US

The primary judge did not give sufficient weight to the disadvantage to Epic if the case proceeded in the US.  These included that:

  • the CCA has remedies that would not apply under California law; and
  • it was expected to be more difficult to obtain an injunction under Californian law.

Error 3: Failure to properly consider the role of the local Apple subsidiary

The primary judge assessed that the Australian subsidiary’s role was merely ‘ornamental’, but this was not correct.  The current proceeding involved claims under Australian laws (the CCA and ACL) against an Australian company (Apple Pty Ltd) which was not a party to the exclusive jurisdiction clause in respect of conduct undertaken in Australia affecting Australian consumers (the operation of the App Store).

Together, these points were sufficient for the Court to agree that the proceedings should continue in Australia, although it did make clear that there is no statutory mandate for proceedings such as these to be heard in Australia.

Forum non conveniens

For completeness, the Federal Court also confirmed that Australia was not a clearly inappropriate forum given that the cause of action relates to Australian competition law involving the Australian App Store, Australian users, and developers for that market, as well as an Australian entity.

For more information please contact Sarah Gilkes or Ben Cameron.