Australia Orders Apple to Open iPhone to Rival App Stores Following Epic Games Lawsuit

Apple argues that the App Store and iOS security are an indivisible product, warning that third-party marketplaces will expose users to malware and degrade the iPhone experience. Epic Games contends that Apple is running an illegal monopoly, using security as a pretext to extract a 30 percent tax on developers and stifle competition.[1][3]

On Thursday, the Federal Court of Australia settled the local chapter of that dispute in Epic’s favor. Justice Jonathan Beach issued a 235-page remedies judgment ordering Apple to open its Australian iOS ecosystem to alternative app stores and outside payment engines.[1][2]

The injunction gives Apple until March 1, 2027, to implement the sweeping changes. However, a specific carve-out allows Epic Games to immediately resubmit its flagship title, Fortnite, to the Australian App Store without waiting for the broader structural overhaul.[1][4]

The ruling marks the conclusion of a legal offensive that Epic launched in late 2020. It represents one of the most significant judicial breaches of Apple's walled garden outside of the European Union's legislative mandates, validating the regulatory posture long maintained by Australian authorities.[1][2]

Dismantling the Walled Garden

Under the court's orders, Apple must permit iPhone users with Australian Apple Accounts to download and install applications through alternative distribution channels. This includes allowing direct web downloads, effectively legalizing sideloading on Australian devices for the first time.[1][3]

Developers will also gain the right to process transactions using third-party payment systems without facing retaliatory platform surcharges. The ruling explicitly prohibits Apple from blocking developers who point users toward external purchasing options or cheaper web-based subscriptions.[3][4]

Furthermore, the court barred the company from imposing artificial friction on alternative payment methods. Apple can no longer force developers to offer its proprietary billing system alongside their own preferred payment engines, a requirement it still enforces in markets like Japan and Brazil.[1][3]

While Apple retains the authority to enforce reasonable security scanning and notarization requirements for outside software, Justice Beach ruled that the company cannot tie those safety checks to proprietary fee collection. The court rejected Apple's defense that its developer agreements were necessary to protect intellectual property.[1][4]

Justice Beach found that Apple held a substantial degree of power in the iOS app distribution and in-app payment solutions markets. He described Apple's 2020 termination of Epic's developer account as a paradigm example of the company enforcing restrictive terms in contravention of Australia's Competition and Consumer Act.[1]

Apple was also ordered to pay 85 percent of Epic Games' legal costs incurred during the liability phase of the trial. The company has until February 15, 2027, to request a compliance extension, though any delay requires judicial approval.[1][4]

Bypassing the Platform Tax

The core of the dispute revolves around the 30 percent commission Apple charges on digital goods sold through the App Store. Epic Games has long argued that this fee is artificially inflated by Apple's refusal to allow competing storefronts to operate on the iPhone.[2][3]

By forcing Apple to allow third-party marketplaces, the Australian court is effectively breaking the company's unilateral pricing power. Developers will soon have the technical capability to route users to external payment gateways, bypassing Apple's billing infrastructure entirely.[3][4]

This shift mirrors the structural changes Apple was forced to make in the European Union under the Digital Markets Act. Yet the Australian injunction goes further by explicitly restricting Apple from levying compensatory runtime fees on alternative marketplaces.[2][3]

In the EU, Apple introduced a Core Technology Fee that charges developers 50 euro cents for high-volume app installs outside the App Store. The Australian court's decision appears designed to preclude that kind of malicious compliance strategy, ensuring developers can actually afford to leave Apple's ecosystem.[3][4]

The ruling also addresses the technical implementation of these alternative stores. While Apple must permit competing app marketplaces on iOS, Justice Beach clarified that the company is not required to distribute those rival stores through its own App Store.[1]

The Corporate Backlash

Apple immediately confirmed its intention to appeal the decision and seek a stay of the orders. In a statement to Reuters, the company argued that any resolution must respect its intellectual property and protect the secure experience that consumers expect from the iOS ecosystem.[1][4]

The tech giant has consistently maintained that opening the iPhone to sideloading compromises user safety. Apple executives frequently point to the curated nature of the App Store as a primary selling point for the device, framing regulatory interventions as a threat to consumer privacy.[3]

Epic Games CEO Tim Sweeney celebrated the outcome, describing it as a massive victory for developers and consumers. The company confirmed that it is already preparing to launch the Epic Games Store natively on Australian iOS devices once the compliance window opens.[2][4]

The Australian victory stands in stark contrast to Epic's legal fortunes in the United States. While a US federal judge previously forced Apple to allow external payment links, the court ultimately rejected Epic's petition to open the American iOS market to competing stores.[2]

Fortnite Returns to iOS

The most immediate consequence of the ruling is the return of Fortnite to Australian iPhones. The game was removed globally in August 2020 after Epic introduced a direct payment system that bypassed Apple's billing engine, triggering a multi-continent legal war.[1][4]

While Fortnite returned to iOS in the European Union earlier this year, Australia remained excluded while the local litigation played out. Epic stated that the game will be available on the Australian App Store within days, marking the end of a six-year absence.[2][4]

The broader structural changes to iOS remain contingent on the appeals process. If Apple secures a stay, the March 2027 deadline for third-party app stores could be pushed back indefinitely while the case moves to the Full Federal Court or the High Court of Australia.[2][3]

The outcome sets a critical precedent for other jurisdictions evaluating Apple's platform control. With the US Supreme Court scheduled to hear Apple's appeal in a related case during its 2026–2027 term, the global regulatory siege against the App Store's closed ecosystem continues to escalate.[2]