Epic Games’ victory – including that of its Luxembourg-based holding company – has two implications: the video game provider will be able to return to the App Store and generate revenue directly, whilst Apple must review the hefty commissions it charges through its app store. (Photo:
In August 2025, Epic Games won the first round of its Australian legal battle against Apple, alongside three other companies, including its Luxembourg-based holding company. The court has now ordered Apple to open up the iPhone to rival app stores and payment systems, at the heart of a dispute worth up to $1bn for Epic and tens of billions for Apple. The US giant has announced its intention to appeal.
Fortnite may return to the iPhone in Australia. But behind this return lies a much broader battle: Epic Games estimates it has lost up to a billion dollars since being banned, whilst Apple is defending a global business whose commission revenue is estimated at nearly $30bn dollars a year.
On Thursday 22 October, the Federal Court of Australia ordered Apple to allow Australian users to distribute iOS apps outside its App Store. Developers must also be able to offer alternative payment methods and direct their customers to external services. This is not an appeal ruling, but the second stage of the proceedings. In August 2025, Judge Jonathan Beach had concluded that Apple had breached Australian competition law by using its market power in two markets: the distribution of iOS apps and in-app payments.
The legal action had been brought by three companies, including Epic Games International, the Luxembourg-based holding company responsible for Epic’s contractual relationships with some of its users based outside the United States.
Interests worth hundreds of millions of dollars
The ruling of 22 October turns this initial victory into concrete obligations. Apple will have to consider any request to reinstate Fortnite and Epic’s other apps in accordance with the same procedures applied to other developers. The iPhone manufacturer will no longer be able to invoke the clauses deemed incompatible with the ruling to keep the game out of its Australian app store.
Fortnite was removed from the App Store on 13 August 2020. Epic had integrated its own payment system into the game, allowing players to purchase content without using Apple’s payment system or paying the associated commissions. Apple then blocked new downloads and updates for the game.
For Epic, the potential loss of revenue is considerable, even though no court has definitively established this. Its founder and CEO, Tim Sweeney, estimated in 2024 that Fortnite could have generated around one billion dollars during its four-year absence from iOS. In May 2025, he stated that the game had generated $300m on iOS during the two years prior to its removal.
These two figures cannot be added together directly. The billion dollars represents a counterfactual scenario incorporating the revenue that Fortnite might have generated, whilst the $300m corresponds to an estimate of the revenue actually recorded prior to the ban. Epic also refers to an indirect effect: the absence of players on the iPhone is said to have reduced the activity of their friends using other devices.
The documents made public during the US trial highlight the scale of what is at stake. Fortnite generated $9.65bn in gross revenue in 2018 and 2019, an average of $4.83bn per year. Epic Games made a profit of $5.5bn across these two financial years, across all its business activities. Whilst these figures are now out of date, they illustrate why access to every major platform is a strategic priority for the group.
The dispute itself is also proving costly. Tim Sweeney stated in May 2025 that Epic’s legal costs had exceeded $100m. The Australian ruling now requires Apple to pay 85% of the costs incurred by Epic up to the liability hearing. The exact amount has not been disclosed, and the costs relating to the remedial phase are yet to be determined.
7% of Apple’s revenue, but three times as profitable
The financial stakes are even higher for Apple. The company does not break down the revenue it generates from App Store commissions in its financial statements. Appfigures has estimated this revenue at $27.4bn worldwide in 2024, of which $10.1bn is in the United States. Another estimate, reported by Bloomberg in September 2026, put the App Store’s annual revenue at around $30bn.
The estimated $27.4bn would represent around 7% of the $391bn dollars in revenue generated by Apple in 2024. Their contribution to profit could be greater than their share of sales. In 2025, Apple’s services division generated $109.2bn in revenue, accounting for 26.2% of the group’s total revenue of $416.2bn, with a gross margin of 75.6%, compared with 34.5% for products. This profitability applies to all services, not just the App Store, but it illustrates the strategic importance of commissions.
The App Store ecosystem facilitated $149bn in sales of digital goods and services in 2025. This figure represents developers’ sales, not Apple’s revenue. Nor does the company take a commission on all these transactions. But even a small change to the rates or the tax base could shift several billion between Apple and the developers.
The Australian court is not merely authorising competing solutions. Apple will not be able to impose charges or conditions that might hinder the use of another app store. The judge also warned that charging a commission on a payment processedngs for failure to comply with the judgement
New price structure in Europe since October
In the European Union, Apple has announced a new pricing structure which came into force on 1 October 2026. In particular, it provides for a 20% commission on certain purchases made via an alternative payment system within an app distributed through the App Store, 15% when a purchase is made via a link to an external website, and 5% on certain transactions carried out within an app distributed outside the App Store. Reduced rates apply depending on the developers and the services chosen. These rates illustrate how the focus of the dispute has shifted. The question is no longer simply whether Apple should open up its system, but how much the company can still charge when distribution or payment goes through a competitor.
Most of the changes in Australia are due to come into force on 1 March 2027. Apple may request a postponement until 3 May, provided it submits its request between 1 and on 15 February, and to persuade the court. The reinstatement of Fortnite is not subject to this deadline.
Australia is joining a movement already underway in the United States, Japan and the European Union. In April 2025, the European Commission fined Apple €500m for preventing developers from freely directing users to offers outside the App Store.
