Anthony v Apple Inc - [2025] FCA 902

FEDERAL COURT OF AUSTRALIA
Anthony v Apple Inc [2025] FCA 902

File numbers: VID 341 of 2022
VID 342 of 2022

Judgment of: BEACH J

Date of judgment: 12 August 2025

Catchwords: COMPETITION LAW — representative proceeding against Apple by developers and users — representative proceeding against Google by developers and users — group members’ claims for overcharge — digital technology — Apple mobile devices — Android mobile devices — operating system software — smart phones — tablets — personal computers — native apps — web apps — web browsers — Apple’s App Store —Google’s Play Store — downloading apps — installing apps — app developers — access to platforms — two-sided platforms — platform operators — distribution services market — market for payment services — Apple and Google restrictive conduct in distribution market and payments market — imposition of restrictive contractual conditions — substantial lessening of competition — contraventions of s 46 of the Competition and Consumer Act 2010 (Cth) — alleged contraventions of ss 45 and 47 —unconscionable conduct — alleged contravention of s 21 of the Australian Consumer Law — counterfactual commissions in the absence of contravening conduct — overcharge of commission by Apple — overcharge of commission by Google — consequential relief

Legislation:
Competition and Consumer Act 2010 (Cth) ss 45, 46, 47, 82, 87, sch 2 ss 21, 236, 237

Federal Court of Australia Act 1976 (Cth) Pt IVA

Cases cited:
Australian Competition and Consumer Commission v Cement Australia (2017) 258 FCR 312

Barnes v Forty Two International Limited (2014) 316 ALR 408

Berry v CCL Secure Pty Ltd (2020) 271 CLR 151

Generic Health Pty Ltd v Bayer Pharma Aktiengesellschaft (2018) 267 FCR 428

Division: General Division

Registry: Victoria

National Practice Area: Commercial and Corporations

Sub-area: Economic Regulator, Competition and Access

Number of paragraphs: 860

Dates of hearing: 15, 18 to 21, 25 to 28 March, 2 to 4, 8 to 11, 15 to 18, 22 to 24, 29, 30 April, 1, 2, 6 to 9, 13 to 16, 20 to 23, 27 to 30 May, 3 to 7, 11 to 14, 17 to 20, 24 to 28 June, 1 to 5 July 2024

Counsel for the Applicants in VID 341 of 2022: Mr A J L Bannon SC, Mr N De Young KC, Ms K Burke, Mr D Preston, Mr B Ryde and Dr S Chordia

Solicitor for the Applicants in VID 341 of 2022: Phi Finney McDonald and Maurice Blackburn

Counsel for the Respondents (Apple parties) in VID 341 of 2022: Mr M J Darke SC, Mr S Free SC, Mr C Bannan,
Ms Z Hillman, Ms L Thomas, Ms X Teo and Mr B Lim

Solicitor for the Respondents (Apple parties) in VID 341 of 2022 Clayton Utz

Counsel for the Applicants in VID 342 of 2022: Mr A J L Bannon SC, Mr N De Young KC, Ms K Burke, Mr D Preston, Mr B Ryde and Dr S Chordia

Solicitor for the Applicants in VID 342 of 2022: Phi Finney McDonald and Maurice Blackburn

Counsel for the Respondents (Google parties) in VID 342 of 2022: Mr C A Moore SC, Mr R A Yezerski SC,
Mr P J Strickland, Ms C Trahanas and Ms W Liu

Counsel for the Respondents (Google parties) in VID 342 of 2022 (confidentiality issues only): Ms E N Madalin and Mr A Hanna

Solicitor for the Respondents (Google parties) in VID 342 of 2022: Corrs Chambers Westgarth

ORDERS

VID 341 of 2022

BETWEEN:
DAVID ANTHONY

First Applicant

DARK ICE INTERACTIVE PTY LIMITED
Second Applicant

AND:
APPLE INC

First Respondent

APPLE PTY LIMITED
Second Respondent

ORDER MADE BY:

BEACH J

DATE OF ORDER:

12 AUGUST 2025

THE COURT ORDERS THAT:
1.The further hearing of the proceeding be stood over to a date to be fixed.
2.Save for the oral summary of these reasons given by Beach J at the time of delivery of this judgment and any republication in any form of that summary, pursuant to s 37AF(1) of the Federal Court of Australia Act 1976 (Cth) and on the ground set out in s 37AG(1)(a), subject to further order, disclosure and publication of these written reasons and the content thereof shall only be made to the parties’ external legal advisors in this proceeding and in proceedings NSD 190 of 2021, NSD 1236 of 2020 and VID 342 of 2022, and to no other person.
3.Liberty to apply.
4.Costs reserved.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ORDERS

VID 342 of 2022

BETWEEN:
BRETT MCDONALD

First Applicant

DARK ICE INTERACTIVE PTY LIMITED
Second Applicant

AND:
GOOGLE LLC

First Respondent

GOOGLE ASIA PACIFIC PTE LTD
Second Respondent

GOOGLE PAYMENT AUSTRALIA PTY LTD
Third Respondent

ORDER MADE BY:

BEACH J

DATE OF ORDER:

12 AUGUST 2025

THE COURT ORDERS THAT:
1.The further hearing of the proceeding be stood over to a date to be fixed.
2.Save for the oral summary of these reasons given by Beach J at the time of delivery of this judgment and any republication in any form of that summary, pursuant to s 37AF(1) of the Federal Court of Australia Act 1976 (Cth) and on the ground set out in s 37AG(1)(a), subject to further order, disclosure and publication of these written reasons and the content thereof shall only be made to the parties’ external legal advisors in this proceeding and in proceedings NSD 190 of 2021, NSD 1236 of 2020 and VID 341 of 2022, and to no other person.
3.Liberty to apply.
4.Costs reserved.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT
BEACH J:

There are four proceedings before me, the joint trial of which took place over a period of four months on questions of liability.
In the first proceeding, the Epic parties have made claims against the Apple parties principally concerning alleged contraventions of s 46 and other provisions of the Competition and Consumer Act 2010 (Cth) (CCA).
The Epic parties are involved in developing entertainment software for personal computers, smart mobile devices and gaming consoles, with their most popular game being Fortnite. They allege that the Apple parties’ contravening conduct has forced app developers including Epic to only use Apple’s App Store to distribute their software applications (apps) to the broad base of iOS device users, and to only use Apple’s payment system for processing the purchases of their in-app digital content by iOS device users. Apple removed Fortnite from the App Store on 13 August 2020.
I have delivered a separate set of reasons dealing with the first proceeding (Epic Games, Inc v Apple Inc [2025] FCA 900).
In the second proceeding, the Epic parties have made claims against the Google parties principally also concerning analogous alleged contraventions of s 46 and other provisions of the CCA. They allege that the Google parties’ contravening conduct has hindered the ability of app developers including Epic to distribute apps to Android devices in a realistic and practical way other than through Google’s Play Store. It is said that Google has achieved this by imposing various contractual and technical restrictions, which stifle or block Android device users’ ability to download app stores and apps directly from developers’ websites and prevent or hinder competition in the distribution of apps to Android devices. It is also said that Google has inappropriately imposed on app developers Google’s payment system for processing the purchases of in-app digital content by Android device users. Google removed Fortnite from the Play Store on 13 August 2020.
I have delivered a separate set of reasons dealing with the second proceeding (Epic Games, Inc v Google LLC [2025] FCA 901).
The third and fourth proceedings, which these present reasons deal with, are representative proceedings commenced by the representative applicants under Part IVA of the Federal Court of Australia Act 1976 (Cth) where similar allegations have been made by them on behalf of group members against the Apple parties and the Google parties concerning the same contraventions of s 46 of the CCA as alleged in the first proceeding and the second proceeding. One of the class actions is against the Apple parties concerning the overcharging of commissions on the App Store. The other class action is against the Google parties concerning the overcharging of commissions on the Play Store.
In each case it is said that the contraventions caused app developers to pay materially higher commissions on paid app downloads and in-app purchases of digital content than they would otherwise have had to pay had the contravening conduct not occurred. For convenience I will refer to the representative applicants in both proceedings on their own behalf and in their representative capacity as the class applicants.
Now in each of these proceedings the class applicants allege that the contravening conduct of Apple and Google contrary to s 46 occurred during the period from 6 November 2017 to 20 June 2022 (the relevant period). So, unlike Epic in the other two proceedings, they make no claim concerning ongoing conduct of Apple and Google concerning s 46.
Now at the trial of these representative proceedings, which as I say I heard concurrently with the two main proceedings being Epic v Apple and Epic v Google, the issues to be determined were confined to liability and an additional issue that was unique to the representative proceedings, being whether there had been an overcharge of commission by the respondents. That latter question has required me to consider relevant retrospective hypothetical scenarios including what commissions Apple and Google would have charged through the App Store and Play Store respectively absent the contravening conduct.
As I have indicated in my reasons in the other cases, these reasons should be read together with my reasons in Epic v Apple and Epic v Google, which I will assume a familiarity with and which provide the necessary foundation for these reasons in the two representative actions.
The class applicants’ case on liability is on all fours with Epic’s case in its separate proceeding against Apple and its separate proceeding against Google save that, as I say, the class applicants allege contraventions by the respondents of Part IV of the CCA limited to the relevant period.
And as I have said, the additional point relevant for present purposes is that it is said that Apple and Google each separately caused app developers to pay materially higher commissions on paid app downloads and in-app purchases of digital content than they would otherwise have done had the contravening conduct not occurred. I will refer to the commissions that would have been paid absent the contravening conduct as the counterfactual commissions.
It is said that in respect of each of Apple and Google, there would have been materially lower counterfactual commissions by reason of there being competition or substantially more effective competition in the relevant markets during the relevant period. I will elaborate on two different dimensions of counterfactuals in a moment.
Now the overcharge issue only arises if there is a finding of liability based on the same case that Epic brings against Apple and Google, which liability findings I have made.
Now in the two Epic proceedings I accepted Epic’s position on the various market definitions.
Further, the effect of my liability findings in the two Epic proceedings is that each of Apple and Google had substantial power in the relevant markets. Further, speaking very generally for the moment, the purpose and effect of the relevant Apple and Google conduct was to lessen substantially competition in the relevant markets.
So, my findings set out in my reasons in the two Epic proceedings against Apple and Google concerning market definition, market power and whether Apple’s and/or Google’s conduct had an anti-competitive purpose should be taken to be part of the foundation for these reasons.
Further, in terms of anti-competitive effect applying the future with and without test, I would make a similar point save that I have also added some additional analysis concerning the counterfactual scenarios which should be read together with what I have said in the other reasons. I will say more about counterfactuals in a moment.
Further, I have paid little attention to the views of Mr Holt, who I have referred to in my other reasons, on market definition or market power, save that Mr Holt has expressed views concerning the question of the economic and accounting profitability of the App Store and the Play Store which do have some relevance to questions of overcharge and counterfactual questions which I will explain in a moment, and which as a consequence I have considered notwithstanding that such matters are also relevant to whether inferences can be drawn as to the existence of substantial market power.
Now it has been necessary for me to consider two categories of hypotheticals which are conceptually different.
The first hypothetical is a retrospective hypothetical, which principally only arises in the class actions on the question of whether there has been an overcharge from the start of the relevant period to the present or from a later point in time to the present. The retrospective hypothetical question is as to what fee Apple and Google would have or could have charged absent the impugned conduct? Such a question has to be answered on the balance of probabilities. But of course, uncertainty and imponderables are involved in the calculus or, more appropriately characterised, the estimation. But one has to do the best one can. Moreover, there may be different figures for different scenarios at different times or over different periods. There may not be one figure, whether just varying with time or otherwise.
The second hypothetical is a future hypothetical applying the with and without test, that is, an assessment of the likely or realistic future with the impugned conduct going forward compared with the likely or realistic future without such impugned conduct going forward.
The second hypothetical goes more to the question of whether any contravention has occurred involving inter-alia s 46. The first hypothetical goes more to the question of overcharge and the issue of monetary relief.
But the second hypothetical can in one sense be posed at an earlier time in that the future with and without test is framed at the time the contravention is said to have occurred, and looking forward from that earlier time.
Now as the class applicants point out, in a counterfactual that assumes the absence of such conduct, it is consistent with economic theory that competition or effective competition, including through actual or credible threat of new entry, will result in a lowering of prices.
I agree with the class applicants that whilst greater competition on quality cannot be ignored, its scope is limited and the likelihood is that such competition would, in the counterfactual, be overwhelmed by price competition.
In the counterfactual without the elements of the impugned conduct, acting as commercially rational firms without market power, Apple and Google would have taken legitimate steps to respond to competition. As the class applicants point out, the rational legitimate step absent the elements of the contravening conduct would have been to lower prices. That Apple and Google would have taken such a step, and promptly, is supported by two further matters, according to the class applicants.
First, they say that to the extent that either held any concern as to the security of their operating systems, the legitimate way to alleviate that concern to the extent it reasonably existed would have been to deter entry by lowering prices.
Second, they say that each had a ready means of recouping revenue lost by lowering prices, being advertising.
Further, the class applicants say that in a commercially realistic counterfactual, it is unlikely that Apple and Google would have acted in any other way. By delaying any price reductions, or relying only on claims of perceived quality, the respondents would have risked rival app stores establishing themselves in the relevant markets. Those rivals would have eroded Apple’s and Google’s market share through price competition.
So, the class applicants say that the credible threat of new entry in the absence of the contravening conduct makes it more likely that there would have been a prompt reduction in commissions charged by Apple and Google for paid app downloads and in-app purchases.
I must say that there is a lot to be said for the class applicants’ points. I will address this later.
Now the expert evidence adduced by the class applicants sought to establish before me that the effective counterfactual commission in both the Apple and Google class actions would have been in the range of between 10 to 20% during the relevant period with a most likely single figure, as an average, of 15%.
Now I have concluded on the evidence as a whole that the counterfactual commission rates would likely have been materially less than were charged by Apple and Google and potentially others during the relevant period, but by how much I cannot say. I will need to hear further from the parties as to this once they have had a chance to consider my reasons.
I should also say that I am not convinced that there should be a single figure for the counterfactual commissions. Any relevant counterfactual commission may vary depending upon the time period one is considering or possibly the type of app or possibly developer revenue type considerations.
Finally by way of introduction, although at this first stage I am dealing with counterfactual commissions and overcharge questions, I am not dealing as such with any loss and damage. Determination of the loss and damage caused to the applicants and group members by Apple’s and Google’s impugned conduct is outside the scope of the initial trial in these proceedings.
For convenience, I have divided these reasons into the following sections:
(a)The structure of the two class actions – [40] to [72].
(b)Matters for determination – [73] to [105].
(c)Some legal principles – [106] to [133].
(d)The counterfactual commission – introduction – [134] to [151].
(e)App Store profitability – [152] to [232].
(f)The counterfactual scenario(s) – Apple context – [233] to [365].
(g)Comparator analysis – Apple context – [366] to [516].
(h)The counterfactual commission(s) – Apple context – [517] to [549].
(i)Play Store profitability – [550] to [639].
(j)The counterfactual scenario(s) – Google context – [640] to [719].
(k)Comparator analysis – Google context – [720] to [834].
(l)The counterfactual commission(s) – Google context – [835] to [857].
(m)Conclusions – [858] to [860].
Now before proceeding further, let me say something about the applicants and the group members in each of the class actions.
The structure of the two class actions
Let me say something first about the Apple class action.
The Apple class action
Mr David Anthony is the first applicant in the Apple class action. During the relevant period, Mr Anthony owned an Apple iPhone and made purchases of apps on the App Store for use on his iPhone. Mr Anthony also purchased in-app digital content within iOS apps during the relevant period.
Mr Anthony says that he entered into three in-app transactions on an iOS device, which have a total value of $21.47. The apps referenced in Mr Anthony’s pleading in respect of which those transactions took place all appear to be gaming apps. Mr Anthony does not identify whether the three in-app transactions on which he relies involved transacting with a developer who was charged a 30% commission rate on those transactions by Apple.

Dark Ice Interactive Pty Ltd is the second applicant in both the Apple and Google class actions. During the relevant period, Dark Ice was a developer of both iOS and Android apps. In that period, it distributed its iOS apps for download by app users through the App Store and for download by app users of its Android apps through the Play Store. Within its apps, and during the relevant period, Dark Ice also distributed in-app digital content to app users. The apps that Dark Ice developed were distributed through the App Store and the Play Store.
The Apple class action was commenced as a representative proceeding on behalf of the following persons.
First, it was commenced on behalf of all persons who at any time during the relevant period purchased an iOS app on an iOS device from the Australian App Store and/or purchased in-app digital content within such an iOS app, and thereby suffered loss or damage by reason of Apple’s conduct.
Second, it was commenced on behalf of all persons who at any time during the relevant period supplied an iOS app for iOS devices via the Australian App Store and/or supplied in-app digital content within such an iOS app, and thereby suffered loss or damage by reason of Apple’s conduct.
Let me say something more about Dark Ice in the Apple context.
Dark Ice entered into a developer agreement and a developer program license agreement (DPLA) with Apple on 6 May 2013. It is the developer of various iOS apps being: an iOS app, Pocket Cal kJ, which adopts the “freemium” model that I have discussed in my reasons in the two Epic cases; an iOS app, Pocket Cal kJ Pro, which is a paid app, that is, the user pays to download the app; an iOS app, Pocket Weight Track, which is free to download and does not offer the user any in-app purchase transactions; and an iOS app, PHL Portal, which is free to download and does not offer the user any in-app purchase transactions.
Now since 22 December 2020, Dark Ice has been enrolled in the App Store’s small business program, paying commissions to Apple for paid downloads of its apps or paid in-app digital content in an amount of 15%. It pays no commission to Apple in respect of Pocket Weight Track or PHL Portal, as those apps are free to download and do not offer any in-app purchases.
From 6 May 2013 until late 2020 or early 2021, Dark Ice paid commissions to Apple of 30% on paid iOS app downloads and downloads of in-app digital content within its iOS apps. During late 2020 or early 2021, Dark Ice joined the App Store small business program. From this time, it paid commissions of 15% to Apple on paid iOS app downloads and purchases of in-app digital content within its iOS apps.
Now it should also be noted that the apps developed by Dark Ice are not intended to offer an iOS user the kind of experience and functionality on the user’s iOS device that would make the apps competitive with all other types of apps, such as game apps.
Further, Dark Ice as a participant in the small business program pays 15% commission to Apple only on the download of the Pocket Cal kJ Pro and such of those in-app purchases which take place on the Pocket Cal kJ and Pocket Cal kJ Pro apps. Apple says that on the class applicants’ own case taken at its highest, that is the same rate which it is said would apply if the allegedly contravening conduct did not occur.
Now in all other respects, Dark Ice pays nothing beyond a nominal USD 99 developer fee to Apple for its use of Apple’s myriad of tools and technology to develop and maintain its iOS apps and its distribution of those apps through the App Store and all other services.
The class applicants’ case is that, based upon Mr Holt’s calculations, Apple’s effective commission rate based on transaction data for Australia was 29.1% in 2017, 28.8% in 2018, 28.3% in 2019, 28.1% in 2020, 26.8% in 2021, and 26.6% in 2022.
Now the class applicants have relied upon an effective rate of commission that they say Apple obtained during the relevant period. But Apple says that the effective rate is misleading because it fails to appropriately weigh the commission rate paid to Apple by reference to the total revenue generated by the developer through transactions undertaken on Apple’s iOS platform. Instead, the so-called effective rate simply divides the total commission for all developers by total paid transactions for all developers.
Apple also says that the class applicants’ effective rate is misleading because it does not take into account that a large percentage of developers who distribute paid apps or offer in-app purchases are eligible for the small business program, which charges commission at a rate of 15%. Many such developers including Australian developers are currently enrolled in the program. Further, Apple says that the effective rate ignores that no commission is charged on multiple types of transactions, for example, downloads of free iOS apps.
Now as I have said, in the Apple class action there are two distinct categories of group members. There are iOS device group members, being all persons who at any time during the relevant period purchased an iOS app or in-app digital content on an iOS device through the Australian storefront of the App Store and who suffered loss or damage by reason of the alleged contravening conduct. Further, there are iOS developer group members, being all persons who at any time during the relevant period supplied an iOS app on iOS devices via the App Store or in-app digital content within such iOS app and who suffered loss or damage by reason of alleged contravening conduct.
The Google class action
Mr Brett McDonald is the first applicant in the Google class action. During the relevant period, Mr McDonald owned an Android smart mobile device and made purchases of apps on Google’s Play Store for use on his Android smart mobile device. Mr McDonald also made in-app purchases within Android apps during the relevant period. Further, as I have said, Dark Ice is the second applicant.
The Google class action was commenced as a representative proceeding on behalf of the following persons.
First, it was commenced on behalf of all persons who at any time during the relevant period purchased an Android app on an Android smart mobile device from the Australian Play Store and/or purchased in-app digital content within such an Android app, and thereby suffered loss or damage by reason of Google’s conduct.
Second, it was commenced on behalf of all persons who at any time during the relevant period supplied an Android app for Android devices via the Australian Play Store and/or supplied in-app digital content within such an Android app, and thereby suffered loss or damage by reason of Google’s conduct.
Let me say something about Dark Ice’s position vis-à-vis Google.
Dark Ice is also a developer of Android apps and in-app digital content within Android apps.
During the relevant period, its Android apps and in-app digital content within Android apps were distributed to Android devices via the Play Store.
Since the commencement of the relevant period, Dark Ice has supplied the Pocket Cal/kj Android app via the Play Store. While the Pocket Cal/kj Android app is free to download, it offers an in-app purchase of Pocket Cal/kj Plus at a price of $4.49. The Pocket Cal/kj Android app was initially released on 13 March 2012 and the current version was released on 4 October 2022.
Since the commencement of the relevant period, Dark Ice has supplied the Pocket Cal/kj Pro Android app via the Play Store as a paid Android app. Its current price is $1.99. The Pocket Cal/kj Pro Android app was initially released on 16 April 2012 and the current version was released on 15 January 2016.
Until 1 January 2022, Dark Ice paid 30% commission on all in-app purchases within its Android apps downloaded through the Play Store and, after that date, the commission paid by Dark Ice on in-app purchases reduced to 15%.
From the inception of the predecessor to Google Play Billing in 2011, Google charged developers a 30% fee on all sales of apps and on in-app purchases. This was extended to subscriptions in 2012. During the relevant period, Google offered exceptions to its headline commission by reducing its commission rate to 15%. These exceptions included the following matters.
From 1 January 2018, Google reduced its service fee for subscriptions that had been active for more than one year from 30% to 15%. From 1 July 2020, Google reduced its service fee from 30% to 15% for the first USD 1 million earned each year by each developer. In October 2021, Google announced that it would reduce its service fee for subscriptions from 30% to 15% in the first year, effective from 1 January 2022. Google also offered reduced service fees of 15%, or lower in some cases, for developers eligible for the play media experience program, the living room accelerator program, the audio distribution accelerator program, and the books and comics accelerator program. Google also entered into various ad hoc agreements offering fees below 15%.
Given that Google offered exceptions to its headline commission rate, it is necessary to adjust the headline rate to account for these discounts in order to calculate the effective rate that it actually charged Android app developers on relevant purchases during the relevant period. This can be determined by taking an average of the various commissions charged by Google, weighted by the value of the transactions subject to the various commission rates, thereby producing an effective commission.
Mr Holt calculated that, taking into account the mix of commission rates charged by Google on relevant purchases globally, its effective commission rate was 29.8% in 2017, 29.5% in 2018, 29.4% in 2019, 29.4% in 2020 and 28.5% in 2021.
Further, and as I have said, in the Google class action group members consist of all persons who, during the relevant period, purchased an Android app on an Android smart mobile device from the Play Store and suffered loss or damage by reason of the Google respondents’ contravening conduct. Group members also consist of all persons who supplied an Android app and/or in-app digital content on Android devices via the Play Store and suffered loss or damage by reason of the Google respondents’ contravening conduct.
Matters for determination
Now an unproductive debate took place before me as to the precise matters to be determined at trial based upon what had been said or done by the previous docket judge, Perram J, at an earlier joint case management hearing. I should say now that Apple’s and Google’s complaints on these questions lacked substance. Moreover, nothing said or ordered by Perram J has in any way foreclosed or constrained how I have proceeded and what I have considered appropriate to decide at this stage. Let me now briefly address the complaints of Apple and Google.
In the Apple class action the class applicants were confined at this stage of the trial to rely on the case run by Epic save in one limited respect, which was to seek to establish that the impugned conduct caused the commissions paid by Dark Ice and iOS app developer group members for purchases of iOS apps and/or in-app digital content within an iOS app by iOS device group members to be materially higher than the commissions that would have existed had that conduct not occurred. A similar and analogous point can be made in the Google class action concerning Android apps and devices and the relevant developers and users.
Now I have deferred the determination of the extent of any pass through, going to the question of how the burden of any established overcharge has been split between developers and users, which ultimately feeds into loss and damage questions, which I am not addressing during this phase.
Now Apple and Google have said that at the trial before me, the class applicants carried the burden of proving that Apple or Google as the case may be overcharged developers by reason of conduct alleged to be in contravention of Part IV of the CCA or s 21 of the Australian Consumer Law, in the relevant period, and carried the burden of proving the amount of any such overcharge.
Apple and Google say that the class applicants have failed to prove the alleged commission overcharge as pleaded and particularised. And they say that if I am not in a position to make quantified findings on the overcharge, then the proceedings must be dismissed.
Apple and Google say that on the pleadings, there is no doubt that the quantification of overcharge is in issue. Moreover, they say that it was ordered that such an issue was to be determined during the first hearing. So it follows that any quantification must occur now. And they point out that I cannot find that overcharge occurred, as alleged, without making a determination about the counterfactual commission rate, which I am not able to do. So they say that the proceedings must be dismissed.
They say that on 6 April 2023 it was ordered by Perram J that such issues should be determined at the first stage trial. And they say that the effect of those orders was to require the class applicants to quantify the overcharge, but not how it was to be distributed between developers and users.
Both senior counsel for Apple and senior counsel for Google stressed that the initial trial was conducted on the basis that overcharge was to be quantified. But if it is not or I am not in a position to do so, then the proceedings must be dismissed.
Apple and Google say that the class applicants’ evidence did not quantify, and the applicants have not proved, the existence or quantum of such overcharge. And it is said that I should not permit the question of quantification of the overcharge to be deferred to some subsequent hearing. It is said that such a course would occasion real prejudice to Apple and Google, which has called lay and expert evidence from witnesses on these issues, including witnesses cross-examined by senior counsel for the class applicants and in respect of whom adverse credibility submissions are now made.
Apple and Google say that any deferral of the question of quantifying overcharge is inconsistent with the basis on which the class applicants were allowed to join in the present proceedings and take advantage of the initial hearing.
Apple and Google say that if the class applicants fail to meet the burden of proving overcharge at the initial stage of hearing, then I must dismiss the class applicants’ cases.
Moreover, Apple and Google say that I ought not permit the whole question of the quantification of the overcharge to be deferred to some subsequent hearing. But I do not accept this.
In the first place, the class applicants have not asked me to defer the issue. Rather, the class applicants say that I am in a position to determine the issue, but have also indicated that other options open to me include not determining a single rate but a range, or finding simply that there was a material overcharge without further specification. Indeed, it is that last option that I have selected from the menu.
Now Mr Darke SC for Apple and Mr Moore SC for Google asserted before me that it was not open to me to fail to determine a separate question or a formulated common question.
But it is not uncommon for judges deciding in the course of writing up their reasons for judgment in complex and lengthy cases, that having heard the evidence it is not appropriate to determine a question as agreed and formulated by the parties or as ordered at an earlier stage of the proceedings. And that does not entail an inevitable dismissal of the proceedings or any particular negative or positive answer to a question posed.
In my view, the proper course is for me to deliver reasons which include findings relating to counterfactual commissions and any overcharge, with further consideration of the necessary issues and outstanding questions, legal, forensic or economic, to be debated in light of those reasons.
The class applicants should have the benefit of my reasons concerning the contraventions that I have found and the corresponding counterfactuals considered in that light before deciding what course to take.
Now before proceeding further, let me deal with a separate pleading point that both Apple and Google have made but which lacks substance.
Apple says that the class applicants’ case on the question of overcharge is based on the commission rate developer group members would have paid to Apple, not any alternative app store, absent the impugned conduct.
Google similarly says that the overcharge alleged is the difference between what the second applicant and developer group members paid to Google during the relevant period, and the commissions that those developers would have paid to Google in the counterfactual.
But the class applicants’ latest version of their statement of claim against Apple pleads that but for the conduct Apple would have faced vigorous and effective competition from competing app stores and direct downloading options. And it pleads that competitive benefits in the counterfactual would have included lower commissions paid by app developers “to app distributors” for purchases of iOS apps and in-app purchases and competing app distributors who would have competed with Apple on commissions for app distribution and in-app purchases. Plainly the expression “to app distributors” is not limited to Apple.
Further, [124] pleads:
124. At all material times during the Relevant Period, the conduct of Apple Inc and/or Apple Pty Limited, referred to at paragraphs 97–98 and 108–109 (s 46), paragraphs 112–113 (s 47), paragraphs 117–118 (s 45) and paragraph 123 (s 21) (individually or in combination, the Contravening Conduct) caused the commissions paid by:
(a) The Second Applicant; and
(b) iOS App Developer Group Members
to Apple for purchases of iOS apps and/or in-app digital content within an iOS app by iOS Device Group Members to be materially higher than the commissions that would have existed had the Contravening Conduct not occurred.
The first part of this pleading addresses the factual, being that Dark Ice and group members paid commissions to Apple. The second part of the pleading addresses the counterfactual, being the commissions that would have existed had the contravening conduct not occurred.
But the pleaded counterfactual is not limited to commissions paid to Apple. It is the commissions that would have been paid in the counterfactual, whether to Apple or rival app stores. Moreover, the particulars that follow are particulars of the allegation as to commissions that would have existed in the counterfactual and are in some respects agnostic as to the payee of such commissions.
Further, the question which Mr Holt was asked to address and did address was what commission rate would have been charged in the counterfactual, with no limitation in that question as to the identity of the payee of the commission. His report makes it clear that in the counterfactual the commissions that would have been paid would not necessarily have been paid to Apple at all.
As the class applicants point out, their pleading asserts the existence of competing app stores and distribution sources in the counterfactual and the payment by developers in the counterfactual of lower commissions to app distributors not limited to Apple. Nowhere in the pleading or the particulars is it alleged that the developers who paid commissions to Apple in the factual would only have dealt with and paid commissions to Apple in the counterfactual.
The class applicants make similar points concerning the latest version of the applicants’ statement of claim against Google.
I am inclined to the view that Apple understood that the class applicants’ case was not limited to the commission that would have been paid to Apple in the counterfactual. I am inclined to the same view concerning Google.
Further, in his expert reports in both cases, Mr Holt analysed the counterfactual commissions generally but not limited to commissions paid to just Apple and Google.

Further, in the joint report in the Epic v Apple proceeding, Professor Hitt, Mr Holt and Mr Houston agreed that relevant considerations in determining the counterfactual position in relation to commission rates included matters that went beyond what Apple would have charged in the counterfactual, including whether there would be new entrants into the relevant market in the counterfactual and how the competition between rival app stores including both the incumbent app store, being Apple's App Store, and new entrants would play out in the counterfactual including competition on price, quality and innovation.
Further, as the class applicants point out, in the joint report in the Epic v Google proceeding, Professor Asker and Mr Holt joined issue on the question of commissions that group members would have paid in the counterfactual to any app distributor, not just limited to Google.
Moreover, each of the Apple and Google concurrent evidence sessions concerning overcharge were not limited to the issue of what prices Apple and Google would charge in the counterfactual, but proceeded on the additional basis that it was relevant to consider the likelihood and fact of entry in the counterfactual of rival iOS and Android app stores and iOS and Android sideloading options, and the extent to which developers in the counterfactual would multi-home or switch to a rival app store in order to take advantage of lower prices or take advantage of side loading options in order to pay a lower commission.
There is no substance to Apple’s and Google’s pleading point.
Some legal principles
For present purposes, it is sufficient to make the following observations on questions of causation and counterfactuals, recognising of course that I am not required in this stage of the trial to make any findings as to the loss or damage suffered by the applicants and group members.
I have said something about the legal principles concerning how to deal with counterfactuals in my reasons in Epic v Apple and Epic v Google. Let me add some additional matters relevant to the present context.
Now a counterfactual is a tool of analysis which assists in the establishment of a causal link between misconduct and loss, and of the identification of the loss. It is not a proxy for causation, which is a legal concept.
The class applicants bear the legal and the evidential onus of establishing causation on the balance of probabilities.
But whilst the plaintiff bears the burden of proving causation and loss in a retrospective hypothetical, once causation is established, uncertainties as to the precise metes and bounds of what would have happened in the counterfactual may sound in an assessment of loss and damage, with the evidential onus lying with the party asserting the relevant fact.
So, in a case alleging damage in the form of a loss of opportunity, the plaintiff will establish causation by showing that the contravening conduct caused the loss of a commercial opportunity which had some non-negligible value. The value itself, that is, the loss, is ascertained by reference to hypotheses and possibilities which can be evaluated as a matter of informed estimation.
In Generic Health Pty Ltd v Bayer Pharma Aktiengesellschaft (2018) 267 FCR 428, which involved an award of damages for patent infringement, Allsop CJ, Yates and Beach JJ held that when dealing with a retrospective hypothetical for the purposes of assessing compensatory damages, it is necessary to form an estimate of the likelihood that the hypothetical, that is, the counterfactual, would have occurred, and adjust any award of damages to reflect the degree of probability (at [181]) that the event would have occurred. We said at [181] to [186]:
We are dealing with a hypothetical situation of the past, namely, whether if a sale of Isabelle had not been made, then an equivalent sale of Yasmin would have been made. Accordingly, we must form an estimate of the likelihood that the hypothetical situation would have occurred: see Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 at 639 per Brennan and Dawson JJ. In that respect, we must assess the degree of probability that such an event would have occurred and adjust any award of damages to reflect that degree of probability: Malec at 643 per Deane, Gaudron and McHugh JJ.
In another sense, the question can be looked at through the lens of the value of a lost opportunity. The lost opportunity was to make a sale of Yasmin if the sale of Isabelle had not been made. In our view, it is not in doubt that it was established before the primary judge that, on the balance of probabilities, for all sales of Isabelle there was a loss of an opportunity to make a sale of Yasmin. The question then is: what is the value of the lost opportunity? On that question, the value is to be “ascertained by reference to the degree of probabilities or possibilities” involved in the hypothetical counterfactual: Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 355 per the plurality.
Another way to express the same point is as Brennan J described it in Sellars at 368:
Although the issue of a loss caused by the defendant’s conduct must be established on the balance of probabilities, hypotheses and possibilities the fulfilment of which cannot be proved must be evaluated to determine the amount or value of the loss suffered. Proof on the balance of probabilities has no part to play in the evaluation of such hypotheses or possibilities: evaluation is a matter of informed estimation.
This theme of informed estimation resonates with some observations made by Hayne J in Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 77 ALJR 768; 196 ALR 257 at [37] and [38]. Any estimation must be done “with as much precision as the subject matter reasonably [permits]”. Mere difficulty in estimating damages does not relieve a court “from the responsibility of estimating them as best it can”.
Interestingly, Staughton LJ in Gerber Garment Technology [1997] RPC 443 at 459 cited Sellars with approval and discussed the matter in terms of evaluating the loss of a chance. Gerber Garment Technology both at first instance ([1995] RPC 383 per Jacob J at 407 and 408) and on appeal ([1997] RPC 443 per Staughton LJ at 459 and 460) evaluated and applied a loss of a chance approach based on the possibilities and probabilities. Moreover, Jacob J at [1995] RPC 383, 395 also invoked the themes of Lord Diplock in Mallett v McMonagle [1970] AC 166 at 176, which resonate with the themes discussed in Malec at 639 and 643 that we have referred to above.
Whichever way one expresses it, in assessing the possibilities or probabilities of a hypothetical counterfactual, one is engaged in the task of estimation, even if the estimation involves an assessment of the counterfactual as being close to a certainty. But being close to a certainty is not the same thing as a certainty. If one is estimating, one still needs to apply a discount, albeit a very modest one, to reflect the assessment that one is not at a certainty. If one is looking at the value of a lost opportunity which is not certain to occur, then the valuation must involve some discount, even if a very modest one.
But Apple and Google say that the class applicants can derive no support from cases about assessment of lost commercial opportunities. True it is that, in such cases, a court may proceed by reference to hypotheses and possibilities not established on the balance of probabilities. But the loss of a chance is a distinctive form of loss which must be specifically pleaded. Where a plaintiff pleads its loss or damage in a defined way, it is not permitted to substitute a loss of opportunity case because its more defined case fails.
Further, they have pointed out what I said in Barnes v Forty Two International Limited (2014) 316 ALR 408 at [119] to [123] (Siopis and Flick JJ agreeing) concerning a damages claim that had been confected late in the day:
A fundamental requirement for the fair trial of allegations of contravention of law requires “the party making those allegations [in this case BlueFreeway] to identify the case which it seeks to make and to do that clearly and distinctly”: Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486; 291 ALR 399; 91 ACSR 128; [2012] HCA 39 at [25] per French CJ, Gummow, Hayne and Kiefel JJ. BlueFreeway failed to do this in relation to its alternative causation and damages case.
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Further, “if a plaintiff has suffered damage of a kind which is not the necessary and immediate consequence of the wrongful act, he must warn the defendant in the pleadings that the compensation claimed will extend to this damage”: Perestrello E Companhia Limitada v United Paint Co Ltd [1969] 1 WLR 570 at 579; [1969] 3 All ER 479 at 485–6 per Lord Donovan delivering the judgment of the court. This was not done by BlueFreeway…
Not only were the appellants “entitled” to a pleading by BlueFreeway identifying the head of loss as “loss of opportunity”, but they were also entitled to have that head of damage properly particularised: see, for example, David Benson Nominees Pty Ltd v Dicksons Ltd [2005] SASC 97 at [39]–[40] per Besanko J. None of this was done by BlueFreeway. For his Honour to permit BlueFreeway late in the day to put its case based upon the alternative scenario produced an unsatisfactory and inherently unfair state of affairs so far as the appellants were concerned. Pleadings serve “to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him”: Banque Commerciale SA (en liq) v Akhil Holdings Ltd (1990) 169 CLR 279 at 286; 92 ALR 53 at 58 per Mason CJ and Gaudron J. BlueFreeway’s further amended statement of claim did not ensure that basic requirement in relation to its alternative scenario. To ensure this basic requirement of procedural fairness, BlueFreeway should have been confined to its pleaded case that did not include this alternative scenario. This was not a case “in which the parties [had] deliberately chosen some different basis for the determination of their respective rights and liabilities”: at CLR 287; ALR 58–9 per Mason CJ and Gaudron J. How the trial was conducted provides no support for such an inference.
In summary, once his Honour had found against BlueFreeway’s pleaded causation and damages case, he should have dismissed the proceeding. The alternative scenario had not been pleaded, opened or run. Moreover, to allow it to be advanced for the first time in closing addresses produced inherent unfairness to the appellants. The course of evidence was not conducted on the basis of the alternative scenario. Moreover, the appellants lost the opportunity to call evidence and to appropriately cross-examine on such a scenario…
Now in the present case, the class applicants do not allege any opportunity was lost. Rather, they postulate an actual overcharge. They allege that there was in fact an overcharge, and class members thereby suffered loss. For the moment I accept that there is no occasion for the application of the principles applicable in loss of opportunity cases and I have put these to one side for the moment.
Let me say something more on counterfactuals.
In Berry v CCL Secure Pty Ltd (2020) 271 CLR 151, the High Court considered, relevantly, the onus of proof in a hypothetical counterfactual where a wrongdoer alleges that but for its contravening conduct, it would have deployed lawful means to bring about the same detriment to the plaintiff.
It was held that whilst a claimant for damages under s 82 of the then Trade Practices Act 1974 (Cth), which is relevantly the same as s 82 of the CCA, is responsible for formulating how the loss or damage claimed is to be identified, and bears the ultimate burden of proof in the sense of establishing their case on the balance of probabilities, the burden of introducing evidence is liable to shift according to the issues between the parties.
Berry is an illustration of the broader principle that whilst a legal onus is constant, an evidential burden can and often does shift. If, how, and to what extent an evidential onus will shift depends on how the applicant puts their case, and how thereafter the parties join issue on questions of causation and loss that arise in respect of the applicant’s chosen formulation.
Now the class applicants bear the legal burden of establishing causation, which in this case is done with the assistance of a retrospective hypothetical counterfactual.
But to the extent that Apple or Google claim that in a retrospective hypothetical counterfactual, they would have charged an additional fee so as to mitigate the financial impact on them of not being permitted to charge an anti-competitive commission, they may at the least have an evidentiary onus on that aspect.
Now in the present context in terms of the claims made by the class applicants, the overcharge part of the case is not concerned with conduct going forward and matters I may pay regard to in formulating any injunctive relief. It is concerned only with what occurred. So understood, the damages to be considered must be compensation for the unlawful conduct that in fact occurred.
An analogy may be drawn with damages in patent infringement cases. It is no defence to a claim for damages by a patentee for lost profits on sales it would have made but for the sales by the defendant of patent infringing products that the defendant could have competed lawfully by using a non-infringing product and causing the same loss of sales.
If, contrary to the foregoing, it is permissible as a matter of principle to consider alternative conduct of Apple or Google in the counterfactual of the type suggested by the respondents, any such conduct would have to have been lawful.
Now at this stage of the trial, the class applicants are only required to prove that the contravening conduct caused the commissions to be inflated and materially higher than they would have been in the counterfactual. That task is met by assessing the counterfactual commissions.
Now I agree with Apple and Google that it is problematic to suggest that loss is to be ascertained by just comparing the factual with a counterfactual in which the only adjustment is subtraction of the contravening conduct. That approach does not answer the question of what position the claimant would be in had the contravening conduct not been engaged in. That is different from just subtracting the contravening conduct and assuming, contrary to real commercial likelihoods, that everything else would be held the same.
In my view it is necessary to bring to account in an analysis of causation all those facts which go hand-in-hand with the supposition that the contravening conduct was not engaged in.
Further, I should make one other point. The decision in Australian Consumer and Competition Commission v Cement Australia Pty Ltd (2017) 258 FCR 312, relied on by Apple, is not relevant to my task of assessing whether the class applicants have established the commission overcharge.
As Epic correctly points out, that case concerned the principles applicable to the imposition of pecuniary penalties under s 76 of the CCA. The ACCC argued that the trial judge erred in the assessment of the appropriate penalty under the Act by failing to precisely quantify the loss and damage suffered as a result of the wrongful conduct. In support of its argument, the ACCC contended that the Court’s consideration of “any loss or damage suffered by the act or omission” as a relevant factor in the exercise of its power under s 76 ought to have been informed by the principles relevant to the assessment of damages under s 82, and in particular, the necessity of estimating the value of loss, however difficult.
That argument found no purchase with the Full Court, primarily on the basis of the obvious conceptual differences between s 76 (deterrence) and s 82 (compensation). To this end, Middleton, Beach and Moshinsky JJ noted that if the ACCC’s position was to be accepted, it was for the regulator to have adduced such evidence necessary to enable the trial judge to make the appropriate quantification of damage or market harm, and it failed to do so. It was in this context, that is, a fallback position from its primary (and correct) decision that precise quantification of loss was not necessary in a penalty context, that the Full Court made some general observations about economic methods of calculating a but-for price in competition cases.
Now it is worth setting out what Middleton, Beach and Moshinsky JJ said (at [497] to [509]):
The principles developed in connection with the assessment of damages, namely, that where it is clear that substantial loss has been incurred, the fact that an assessment is difficult because of the nature of the damage is no reason for awarding no damages or merely nominal damages, are not directly comparable with the present context.
First, the assessment of damages is a different exercise to the imposition of a civil penalty. The Court is principally concerned in the present context with general and specific deterrence. The perspective of putting a party in the position that they would have been in if a contract had been performed, or with putting an injured party in the position that they would have been in but for the statutory contravention or the tortious conduct has little to do with the matter.
The imposition of a penalty is affected by many questions which are then balanced as a matter of intuitive synthesis. The amount of loss or damage causally connected to the contravening conduct is only one of the relevant factors. Moreover, the exercise of intuitive synthesis is an evaluative exercise. To suggest that there must be quantitative precision on any one factor feeding into the question of what a penalty should be is misplaced. Contrastingly, in the assessment of damages or the value of a lost opportunity, some monetary quantification resulting from the process of some degree of estimation, albeit imperfect, must be made (see for example Sellars v Adelaide Petroleum NL at 350-355 and 368; Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 77 ALJR 768; 196 ALR 257 at [38]; and Malec v JC Hutton Pty Ltd at 642 and 643). And indeed that quantification is the singular goal of such a compensatory exercise. But in setting a penalty, the goal is to fix a monetary amount for the penalty sufficient to address the principal objective of deterrence, rather than to quantify loss or damage as compensation.
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Further, if the ACCC’s principle was to be accepted, contrary to our view, it was a matter for the ACCC to have adduced such evidence as was necessary to enable the primary judge, to the requisite standard (s 140(2) of the Evidence Act 1995 (Cth)), to make the appropriate quantification of damage or market harm. It failed to do so. It did not seek to apply and justify quantification based upon any sufficiently probative method. It was not appropriate for the ACCC to say in effect to the primary judge or contend before us that his Honour had to do his best with the ad hoc and less than systematic approach which the ACCC advocated. In elaboration, we would note the following.
First, the only expert evidence concerning market harm relied on at the penalty hearing was from Dr Philip Williams, who was called by the respondents. The ACCC chose not to adduce its own expert evidence on the subject. Dr Williams’ evidence was to the effect that the matters relied upon by the ACCC did not provide a sound economic basis for quantifying the effect of the conduct. In the absence of contrary and probative evidence, his Honour was entitled to accept and act upon Dr Williams’ opinions.
Second, it may have been possible for the ACCC to probatively measure the benefits derived or the market harm suffered even if the identity of the entities that might have entered the market was unknown. Dr Williams referred to economic literature that suggested there were various methods that could have been employed to quantify market harm: Penalty Reasons, [641]. But the ACCC chose not to rigorously engage with any such methodologies. Moreover, its criticisms of the primary judge’s conclusions as to the lack of probative evidence (see for example at [818](14)) are unwarranted, particularly in the context where it only chose to put before his Honour its own, if we may say so, piece-meal analysis.
We accept that estimating damage from anti-competitive behaviour of the type found by the primary judge in the present case is difficult. The question of making such an assessment usually involves in an economic context a “but for” analysis. But in a legal context where compensatory loss is being assessed, sometimes a “but for” approach may not be suitable or comprehensive. Section 76(1) in using the phrase “any loss or damage suffered” may embrace but is clearly not confined to the lens of compensatory loss. It is to be analysed in part in its economic context. And for economists, a “but for” analysis is usually appropriate. The question normally posed in such a framework is: what would the price of the relevant product have been absent the anti-competitive conduct? This is compared with the actual price to determine loss. Of course, such an approach may not consider other types of loss such as harm done arising from the reduced use of the relevant product because of the higher price that may also have to be considered. But the issue principally posed for economists is how to calculate the “but for” price. Various but problematic methods may suggest themselves (see Brander JA and Ross TW, “Estimating Damages from Price-Fixing” in Pitel S (ed), Litigating Conspiracy: An Analysis of Competition Class Actions (Federation Press, 2006) at 335), including:
(a)       making before and after comparisons of prices;
(b)       using marginal cost or average cost as a proxy for price;
(c)       using prices in similar markets as analogues; and
(d) undertaking econometric simulations to determine a competitive price benchmark.
But before the primary judge the ACCC did not put forward any probative analysis using any of these methods, although it did suggest rough and ad hoc approximations utilising some aspects of methods (a) and (c).
Third, in relation to some aspects of its analysis the ACCC relied upon what the respondents not unfairly described as a “patchwork quilt of figures” from budget assumptions or forecasts prepared by different personnel of the respondents at different times. But these were premised on counterfactuals and other assumptions in part correctly rejected by the primary judge. Moreover, the ACCC inappropriately equated perceived benefit with market harm. The ACCC’s approach was correctly rejected by the primary judge.
Fourth, …. Moreover, given that a comparison was required between the actual position of the respondents with the counterfactual position where the relevant contracts did not contain the impugned provisions (rather than the total loss of the contract(s) to a third party), it was incorrect for the ACCC to assert that the whole of the EBIT should be taken to have been causally connected to the contravening conduct. Indeed and more generally, in our opinion the ACCC never properly engaged with his Honour’s statement at [489] of the Penalty Reasons (set out at [313] above).
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Finally and as a general observation, we of course accept that the mandatory consideration of loss does not necessarily require evidence from victims or expert evidence on a “but for” basis (Reckitt Benckiser at [93]); moreover, in some cases an assessment can be made even absent precise evidence on causation or mathematical precision. The primary judge was required to consider and analyse the information before him, and draw any necessary but reasonable inferences open to him in making some assessment. But to say as much is not to say that his Honour was in error in failing to make a quantification of the type contended for by the ACCC. We would also note that the forensic context that his Honour was dealing with was quite different and considerably more complex than that discussed by the Full Court in Reckitt Benckiser at [98]. Depending upon the context and the exercise, more or less precision in the assessment may be justified. At the end of the day the task is principally an evaluative exercise for the trial judge...

None of these observations assist Apple or Google in the present context.
Moreover, as I said to counsel in argument concerning hypothesised cartel behaviour involving price fixing, which is not the present context of course,:
… you can have the hypothesised cartel period, and you look at the prices in that period, and then compare them with the prices before the cartel started and/or the prices after the cartel is over, and you run multiple linear regression calculations, and you use a dummy variable for the within period cartel prices, and you’re able to work out through linear regression analysis what the price has done during the cartel period and causally relate that to the collusion as distinct from just other market or nonmarket factors. And that’s a very standard way that sort of thing is done in the US. Now, of course, we’ve got something much more complicated.
The counterfactual commission — introduction
Let me now introduce in more detail the class applicants’ cases against Apple and Google concerning the counterfactual commission(s).
Mr Holt calculated a counterfactual commission range that would apply across the relevant markets.
As he said in the concurrent evidence session in the Apple class action, what he measured was the effective average that would apply across the market. That could include some app stores charging higher amounts and some charging lower and it also allows for differentiation on quality. Further, it could allow for some app categories to have higher rates and some to have lower. Moreover, he said that there was nothing in his analysis that precluded any degree of individualised outcomes of that nature.
Similarly, in the concurrent evidence session in the Google class action, Mr Holt said that his analysis did not seek to estimate what the Play Store specifically would have done, but was a wider assessment of the overall cost of distribution in the Android app distribution market. He said that his range was not intended to cover all individual transactions, but the effective average, and he also said that his approach did allow for product differentiation.
Mr Holt’s counterfactual commission range was also an effective average range across the relevant period, rather than the settled range that would have been arrived at or after a period of competition within the relevant period. Mr Holt said that what he had done was to identify an effective overall average that he expected would apply over the relevant period.
Mr Holt explained the following in an exchange with me:
HIS HONOUR: But that would change in terms of dynamics and how new entrants came in. So, if low quality, what they were doing etc, and how the incumbent reacted to those new entrants. How the incumbent might want to back out the potential for that new entry or threat to grow. But that might all occur dynamically – do you follow what I mean? So in a counterfactual, I just wonder whether I should be looking at one rate at all – some unitary, you know, single rate or I should be looking at it more dynamically over time.
MR HOLT: I think either are potential alternatives, I think, would be open to you. The approach that I’ve adopted is to look at this as an effective average over the relevant period.
Mr Holt’s evidence was that having regard to the relevant comparators, a competitive level of commission in a competitive iOS app distribution market and a competitive Android mobile app distribution market would be in the range of 10 to 20%, with a most likely level of 15%.
Mr Holt said that the counterfactual commission of 10 to 20%, with a most likely level of 15%, includes a component attributable to the use of in-app payment solutions in the range of 2.2 to 10% of the relevant purchase. He said that this is consistent with Apple’s current monetisation strategy where the commission charged on paid app downloads and in-app purchases is said to include the value related to payment processing and related activities. And he said that it is also consistent with Google’s monetisation strategy, where payment processing services are included in the commission charged on paid app downloads and in-app purchases.
Further, if it is necessary to identify a precise figure for the counterfactual commissions, Mr Holt considered that, based on a comparator analysis, an average effective rate of 15% is the most likely commission rate that app developers would have paid but for the contravening conduct.
Further, if Apple were to adopt the counterfactual commission at the lowest end of the range advanced by Mr Holt, being 10%, Mr Holt considered that it would remain profitable on an operating income basis even if the App Store’s market share dropped to 25%. Similarly, at a market share of 25%, the App Store’s return on assets would remain in excess of 100% and it would continue to generate an infinite return on capital employed. The App Store would therefore remain highly profitable at the counterfactual commission rate.
Further, Mr Holt said that adopting the conservative assumption that the size of the Android mobile app distribution market would remain the same following new entry absent the contravening conduct, the Play Store would remain profitable charging a commission of more than 10% and with a market share as low as 25%.
Let me now turn to the detail and begin with the Apple context.
General – Apple context
In this section of my reasons I will address the class applicants’ case concerning Apple on the question of overcharge including the question of counterfactual commissions.
Now it is convenient to address four topics in the following sequence.
First, I will address the question of App Store profitability, which of course I have addressed in more detail in my reasons in Epic v Apple. This topic is relevant to and is an input into the second to fourth topics.
Second, I will address the counterfactual scenarios and in this context principally address the appropriate retrospective hypothetical scenarios as they are relevant in the class action context. The future with and without test relevant to whether there have been any statutory contraventions by Apple has already been addressed in my reasons in Epic v Apple.
Third, I will then address Mr Holt’s comparator analysis. Now this topic could have been addressed before the second topic, but I have found it convenient to proceed in the sequence that I have outlined.
Fourth, I will finally address the output of this analysis which relates to the counterfactual commissions.
App Store profitability – Apple context
Now the absence of entry in the face of high profitability is some indication of barriers to entry and some indication of substantial market power.
Let me turn to this question of profitability, which I have discussed elsewhere, and begin with a summary of Mr Holt’s evidence in that regard.
Mr Holt said that the most useful metrics for assessing market power or whether profits are supra-competitive are asset-based metrics such as return on capital employed (ROCE) or return on assets (ROA). And he expressed the view that in a market characterised by competition, any excess returns above a company’s weighted average cost of capital (WACC) would be expected to be eroded over time.
Now as I have indicated in my reasons in Epic v Apple, Professor Davila concluded that the App Store exhibited high profitability in the period FY2017 to FY2019, with infinite returns on its ROCE. Professor Davila calculated the capital employed by looking to the assets attributable to the App Store less its short-term debt as these appeared on Apple’s balance sheet, concluding that the App Store’s returns were very attractive both in absolute terms and in terms relative to other companies. Mr Holt agreed with Professor Davila’s approach in this regard.
Further, Professor Wright said that the App Store’s profit levels enabled it to contribute to large fixed costs of Apple, being consistent with a conclusion as to it generating supra-competitive profits and an outcome that would not be possible if it was subject to close competition. Mr Holt accepted this position.
Mr Holt also said that Professor Davila’s calculations in relation to the App Store’s profitability were robust to alternative assumptions regarding the allocation of cash to the App Store’s balance sheet, the accuracy of the accounting data sources used by Professor Davila, and the allocation of a proportion of Apple’s research and development expenses.
Mr Holt adopted a cash retention method as an alternative approach to the allocation by revenue method. So, the App Store was presumed to retain the cash that it generates in any given year before remitting it to Apple on the first day of the following financial year. According to Mr Holt, the cash retention method still showed an ROCE in the range of 178% to 189%, which represented very high returns. It also showed an ROA of approximately 87%, which again represented very high returns.
Further, Mr Holt adopted two alternative assumptions, where billings and revenues were 50% lower than those on which Professor Davila relied, and expenses including opex were 50% higher than those on which Professor Davila relied. He found that even under these assumptions Apple remains strongly profitable. So, even if there were inaccuracies or discrepancies in the financial statements relied on by Professor Davila, Mr Holt’s view was that it was unlikely that there would be any material impacts on the ultimate conclusion that the App Store exhibits very high profitability.
Mr Holt concluded that despite being more conservative than the approach taken by Professor Davila, the cash retention method still showed an ROCE in the range of 178% to 189% and an ROA of approximately 87%, both of which represent a very high return.
Mr Holt said that the App Store would have remained profitable had it absorbed as much as 60%, or capitalised and amortised as much as 80%, of Apple’s R&D expense in FY2018. This conclusion was arrived at in circumstances where Mr Holt’s view was that such a large proportion of Apple’s R&D expenditure would not have been allocated to the App Store in light of the extent of Apple’s other businesses and the nature of the R&D expenditure.
Further, Mr Holt accepted the approach adopted by Professor Davila with respect to the allocation of common costs and observed that Apple itself has regard to the allocation of common costs in undertaking internal profitability analyses, regardless of the broader purpose for which that internal analysis is undertaken. Further, Mr Holt agreed with Professor Davila’s use of an allocation by revenue method to attribute assets to the App Store from a consolidated balance sheet.
Mr Holt concluded that the profitability outcome was not sensitive to a variety of cost allocation sensitivities, leading him to conclude that the App Store exhibits a high degree of profitability, regardless of the ultimate degree of cost allocation undertaken. He considered that supra-competitive profits would indicate that there is scope for new entry and the engendering of a reduction in the commission rates likely to be paid in the counterfactual.
Now Dr Majumdar was critical of Professor Davila’s approach to attributing value to intangible assets utilised by the App Store, although he did not seek to precisely identify those assets. He also did not suggest an appropriate methodology for valuing such assets or an appropriate value for those assets.
Further, it is to be noted that Dr Majumdar’s challenge to the reliability of Professor Davila’s ROCE analysis for the App Store was also underpinned by his opinion that the ROCE analysis was flawed due to the accounting analysis failing to accurately account for the App Store’s intangible assets in its asset base.
Now as the class applicants explained, Mr Holt accepted that intangible assets should be accounted for, but rejected Dr Majumdar’s assertion that the relevant intangible assets included assets other than intellectual property assets. He concluded that relevant intangible assets should relate to costs actually and necessarily incurred from the running of Apple’s business in general and which create an asset separate from any of those arising from the general running of the App Store, but that was not the case here.
Mr Holt said that one way to include intangible costs in the App Store’s asset base is to capitalise R&D costs, which is what Professor Davila did.
Further, Mr Holt’s sensitivity allowance demonstrated that his conclusions as to the high profitability of the App Store were, similarly, not sensitive to any realistic attribution of the appropriate value of intangibles to the App Store.
Mr Holt agreed with Professor Davila’s conclusion that the App Store exhibited high profitability in the period 2017 to 2019. Mr Holt concluded that applying Professor Davila’s assumptions to the data and estimating certain datapoints that are not available for the period, the App Store remained highly profitable throughout the relevant period. In his view the analysis showed that Apple’s returns were significantly and persistently higher than the cost of the assets or capital deployed in earning those returns.
Further, in Mr Holt’s view, a high level of profitability would normally attract market entry. And in his view this would have resulted in downward pressure on commission rates paid by iOS app developers.
Analysis
Now I agree with Apple that neither market power nor anti-competitive conduct can be established on the basis of profitability alone, and a firm that innovates and gains a competitive advantage may earn higher ROCE for the period that it is able to sustain that competitive advantage.
I have indicated elsewhere that App Store accounting margins, even if correctly measured, are not definitive concerning monopoly power. Further, I also accept that firms that possess significant intangible assets and invest heavily in intellectual property and innovation often have meaningful accounting profit margins.
As I discussed in my reasons in Epic v Apple, high accounting profits do not demonstrate the existence of market power, nor its exercise or misuse. And I also agree with Apple that whatever limited relevance profitability could have in relation to those matters, its role in the calculation of a but for price is questionable.
But in any event, I agree with Apple that Mr Holt’s profitability calculations are unreliable.
Now Mr Holt had regard to Professor Davila’s profitability calculations. He agreed generally with Professor Davila’s approach and carried out further profitability calculations based on alternative assumptions. But I agree with Apple that in doing so, Mr Holt did not grapple with some objections to Professor Davila’s approach.
His calculations did not address the point made by Apple’s accounting and economic experts, which was that in order to meaningfully consider the profitability of the App Store, it would be necessary to consider what a stand-alone app store would be required to pay Apple for access to the Apple assets that are necessary to operate for the App Store, and for access to Apple’s customer base.
Dr Majumdar said that if the App Store were to operate on a truly standalone or independent basis, it would need to pay Apple to use the relevant assets or it would have to incur the cost of developing its own equivalent assets. Whether or not Apple fully recovers its iOS costs is not relevant to whether Apple would grant this use for free to an independent or truly standalone App Store.
But as Apple points out, the problematic premise of the class applicants’ case is that the Apple respondents would grant access to its platform for free.
Now Mr Holt accepted that his calculations assumed that the App Store has access to Apple’s customer base for free, and he argued that in the counterfactual Apple would not charge a fee for access to iOS and iOS users. But as Apple points out, the commercial unreality of that assumption can be illustrated by reference to subsequent events.
As Apple points out and as I have mentioned elsewhere, in Europe, where Apple has been required to allow alternative app stores in response to the Digital Markets Act, it has imposed a “Core Technology Fee” of €0.50 for each “First Annual Install” of an alternative app store. This occurs the first time in a twelve-month period that a user installs the app on iOS. In other words, when required to allow alternative app stores, Apple has decided to charge, essentially on a per-customer basis, for access to its technology and iOS customer base.
Further, the class applicants say that Apple’s experts have not posited a value for the intellectual property that they say is lacking. But I agree with Apple that this is an attempt to reverse the onus which rests with Epic and the class applicants to establish their allegations of market power and to make good their contentions about profitability.
In any event, whilst internally generated intangible assets cannot be valued with precision absent a sale, it is possible to estimate the value of Apple’s internally generated intangible assets.
As Apple pointed out, Mr Samuel said that the market capitalised value of Apple’s equity is currently approximately USD 3 trillion. Its accounting value for equity in its financial statements as at 25 September 2021 was only USD 63.1 billion. In his opinion, the difference is mostly attributable to the value of its internally generated intangible assets. I note that the 30 September 2023 figure was USD 62.1 billion.
Both Professor Davila and Mr Holt treated the App Store as having free access to Apple’s customer base and internally generated intangible assets, with the exception of accounting for certain recent R&D expenses.
Moreover, whilst Mr Holt acknowledged that the assessment of the App Store’s profitability could have regard to any properly assessable cost of generating the intellectual property on which the App Store relies, he observed that there is insufficient information to properly assess either such rights held by Apple that is relevant to the App Store or the cost to Apple of generating such rights.
I agree with Apple that if a profitability assessment based on asset-based measures is to be useful for determining whether commission rates are supra-competitive or not, the asset base must be measured reliably.
And I agree with Apple that on any view, the value of Apple's internally generated intangible assets is very substantial, and Apple would not provide an app store that was not part of the Apple ecosystem, and generating revenue for Apple, with free access to them.
Let me say something about Mr Holt’s sensitivity analysis.
As the class applicants explained, Mr Holt calculated the App Store’s profitability under various counterfactual scenarios, and concluded that, on his calculations, the App Store would be highly profitable in any scenario in which it charged a commission of between 10% and 20% and enjoyed a market share of between 25% and 100%.
But I agree with Apple that even if Mr Holt’s calculations were reliable, his sensitivity analysis would not demonstrate that Apple has market power or has engaged in anti-competitive conduct.
In order for profitability metrics to provide meaningful insight, they should be able to distinguish between competitive and supra-competitive commission rates. But Professor Davila’s profitability metrics were insensitive to changes in the App Store commission rate and so could not distinguish between competitive and supra-competitive commissions.
Further, Dr Majumdar explained that he had a concern with Mr Holt’s sensitivity tests, because on Mr Holt’s calculations, a 10% commission rate would give rise to infinite ROCE and ROA and ROGM metrics that are substantially in excess of Professor Davila’s comparators. Dr Majumdar explained that, for those reasons, Mr Holt’s calculations do not provide an economically useful profitability metric. I accept that evidence.

Professor Asker analysed service fees charged by third-party app stores in China where the Play Store is not made available by Google and where third-party app stores are more numerous.
Further, Professor Asker considered the Play Store’s service fees before and after the commencement of certain elements of the impugned conduct, being Project Hug and the RSA3s. Professor Asker determined that the Play Store’s fees decreased after that conduct, suggesting that that conduct did not lead to higher prices, including because Mr Holt did not identify any evidence to suggest that the decreases in the Play Store’s service fee would have been larger absent the impugned conduct.
Seventh, Google says that Mr Holt’s approach did not explain why various sources of apps and content have commission rates of 30% or even more, in multiple contexts that very clearly do not correspond to any market power or lack of competition. Mr Holt did not deal with this at all.
Further, Google says that Mr Holt’s analysis inappropriately extrapolated the commission rates charged by his selected comparators at the end of the relevant period to the entire relevant period. In doing so, Mr Holt overrode his yardstick results and selected different outcomes, which is inconsistent with the yardstick methodology.
Let me say something more concerning Google’s submissions as to the use of Steam’s commissions.
Mr Holt gave evidence that the top of his counterfactual range was derived from Steam’s commissions. But Google says that Mr Holt selected the rate that Steam only gives to developers with revenues of over USD 50 million on Steam.
Google says that there are two problems with Mr Holt’s approach.
First, it says that insofar as one is doing a yardstick analysis for the whole of the Android mobile app distribution market, and using Steam as a comparator in that analysis, it makes no sense to focus only on Steam’s lowest rate offered to the small minority of developers with revenues over USD 50 million. If one is using PC app stores as the yardstick, one must take them as one finds them.
Second, it says that Mr Holt did not, in fact, understand how Steam’s commission structure worked. Mr Holt believed that Steam charged a 20% flat commission for developers with revenues above USD 50 million, but that is not correct. The true position is that Steam charges a 30% commission to all developers, regardless of revenues, on the first USD 10 million of revenues they earn on Steam, a commission of 25% on revenues earned between USD 10 million and USD 25 million, and a commission of 20% on revenues above USD 50 million.
It says that the error is significant because reasoning consistently, the top of Mr Holt’s counterfactual range should have been above 20%, as it is clear the blended average commission for developers earning revenues on Steam above USD 50 million will be larger than 20%.
But more fundamentally, Google says that when the correct Steam commissions are used the Play Store’s commissions appear to be lower than Steam’s for the vast majority of developers who pay a service fee to Google.
It says that on Professor Asker’s estimate, based on the global Play Store revenues of US developers that publish on the Australian Play Store, 99.6% of developers who pay a service fee to Google would have a lower service fee on the Play Store than on Steam. Further, Professor Asker found that for developers who paid a service fee to Google, there would be a 1% difference between the average service fee they paid to Google as compared to what they would have paid to Steam based on Steam’s commission structure.
It says that this implies that if Steam is the correct comparator for the Play Store, the Play Store’s commissions were competitive.
In summary, Google says that Mr Holt’s yardstick analysis should not be accepted.
Analysis
Generally speaking, I have not accepted Google’s arguments.
Now I would make similar points here concerning Mr Holt’s comparator analysis that I have made earlier in the Apple context concerning comparators with the App Store. I will not repeat that discussion.
Now Professor Asker and consequently Google advanced a number of criticisms of Mr Holt’s PC app distribution yardstick approach. I will focus on Professor Asker’s criticisms for the moment.
First, Professor Asker said that Mr Holt did not include in his analysis two PC app stores, being Good Old Games (GOG) and the Amazon App Store.
Second, Professor Asker said that Mr Holt had not presented sufficient evidence to exclude the Mac app store as a relevant app store within the PC app distribution market.
Third, Professor Asker said that Mr Holt failed to account for differentiation within the PC app distribution market by focusing on the commission rates charged by the market as a whole rather than focusing on the participant in that market that most resembles Google.
But as to the first proposition being that Mr Holt failed to take into account two relevant PC app stores, as the class applicants point out, Mr Holt said that GOG was considered but excluded from his analysis of the PC app distribution market on the basis that GOG’s headline commission rate is negotiable, and GOG is “known for entering into custom revenue share models with different developers”. So, Mr Holt considered that it was unclear what GOG’s effective commission rate was, and therefore it would not be prudent to include GOG in the overall analysis.
Similarly, as the class applicants point out, Mr Holt excluded the Amazon App Store from his analysis of the PC app distribution market on the basis that it was not a distribution platform for PC apps but rather was used to distribute Android apps on Android smart mobile devices, Amazon’s proprietary “Fire” devices and Windows devices capable of running Android apps.
In any event, I agree with the class applicants that Mr Holt’s analysis of additional documents discovered by Google relating to the Amazon App Store suggests that the effective commission rate on the Amazon App Store across all devices between 2018 and 2021 supported his position.
As to the second proposition in respect of the Mac app store, as the class applicants point out, Mr Holt said that the Mac app store commission rate of 30% is not a reliable datapoint for the purposes of determining a competitive commission rate because Apple has a policy of setting a uniform commission rate across all of its app stores rather than in response to competitive pressure. And as the class applicants say, there is also little evidence to suggest that the 30% commission rate on the Mac app store was set in response to any competitive benchmark.
In my view, it was appropriate for Mr Holt to exclude the Mac app store as a reliable datapoint for the purposes of establishing the counterfactual commission.
As to the third proposition being that Mr Holt failed to accommodate differentiation in the PC app distribution market and instead should have focused on the commission rate charged by the participant in the market that most closely resembles Google, which Professor Asker said is Steam, this proposition is problematic.
As the class applicants point out, Mr Holt’s approach of determining a 10 to 20% range for the counterfactual commission was based on his understanding that there was likely to be differentiation in the counterfactual market which would mean that some Android app developers would offer lower-quality, lower-priced distribution platforms while others focused on higher-quality app stores which charged commensurately higher commission rates. Indeed, as was pointed out, when markets consist of differentiated products, that is, products with differing quality, the market equilibrium will sustain multiple prices, with firms selling higher-quality products charging higher prices.
So, in arriving at the counterfactual commission, I agree with the class applicants that it would be misleading to focus on the commission charged by a single entity within the comparator market rather than the commissions charged by a range of stores within that market, since, in the absence of the contravening conduct, many of the transactions that occurred on the Play Store would likely have occurred on competing platforms.
I also agree with the class applicants that it is unlikely that Steam is the relevant counterpart to the Play Store in the PC app distribution market.
It is incorrect to assume that the quality of the Play Store in the counterfactual would be the same as in the actual, since the latter is at least in part a product of the contravening conduct. Absent the contravening conduct, rival Android app stores would have had greater ability and incentive to innovate and invest in the dimensions of quality that Professor Asker cited.
As the class applicants say, to the limited extent that it may be helpful to identify the most direct comparator to the Play Store in the PC app distribution market, this is likely to be the Microsoft Store. It is the only PC app store that does not primarily focus on games and so carries a variety of applications. The Microsoft Store also exhibits many other similar characteristics to the Play Store. Moreover, Professor Asker’s trenchant criticism of the lack of quality of the Microsoft Store lacked foundation.
Contrastingly, Steam focuses only on games. In contrast to the Play Store, Steam offers community features such as access to user forums to discuss games, a hub for sharing user-created content or tools relating to games, a community market for users to buy and sell in-game items, and a platform for users to share content such as user guides to games, artwork and videos. Community features such as allowing users to customise games and the ability to trade virtual items also benefits developers, as such features are associated with a price premium and a slower decline in prices over time.
Let me say something more about Steam.
Now Professor Asker said that the Play Store’s fee is comparable to and often lower than the commission charged by Steam. But these assertions are problematic for the following reasons as the class applicants pointed out.
First, Mr Holt’s approach of determining a 10 to 20% range for the counterfactual commission accommodates differentiation in the counterfactual market in that some Android app developers would have offered lower-quality, lower-priced distribution platforms while others focused on higher-quality app stores which charged commensurately higher commission rates.
In considering the comparator PC app distribution market, it would be wrong to focus on the commission charged by a single entity rather than the commissions charged by a range of stores within that market.
Second, and in any event, Google has not established that Steam is the counterpart to the Play Store in the PC app distribution market.
In contrast to the Play Store, Steam offers community features that are not present on the Play Store. Indeed, Professor Asker accepted in cross-examination that there are significant differences between the Play Store and Steam. Whilst Steam is an app store focused on gaming apps, the Play Store provides distribution services for both gaming and non-gaming apps. Further, Steam offers a forum for discussing games whereas the Play Store does not offer any equivalent service or feature. Further, Steam offers a hub for sharing user-created content and tools relating to games whereas the Play Store does not offer any equivalent service or feature. Further, Steam offers a community market for users to buy and sell in-game items whereas the Play Store does not. These community features of Steam that are absent on the Play Store are associated with a price premium and a slower decline in prices over time.
Moreover, as Mr Holt said, it is incorrect to assume that the quality of the Play Store in the counterfactual would be the same as in the actual, since the latter is at least in part a product of the contravening conduct. Absent the contravening conduct, rival Android app stores would have had greater ability and incentive to innovate and invest in the dimensions of quality that Professor Asker cited.
Third, Professor Asker said that Steam is more informative of the market counterfactual than other app stores because his preferred approach would consider the prevalence and the extent to which any of these PC app stores are actually used.
The implicit assumption is that Steam has market dominance in the PC app distribution market over other app stores within that market. But the evidence does not support that proposition.
The high point of the evidence cited by Professor Asker is an internal Google presentation from 2021 which asserts that Microsoft Store lags Steam in popularity as a games launcher. But this does not disclose the relative market shares of the two entities. It concerns the purported popularity of each as a games launcher rather than as a PC app store. Further, it relates to a single pinpoint date in time rather than establishing the position over a time-series. And it fails to have regard to the market position of any other app store in the PC app distribution market.
Fourth, the assertion that Steam is the only reliable app store comparator within the PC app distribution market contradicts Professor Asker’s contention elsewhere that, in having regard to the PC app distribution market, Mr Holt’s approach was flawed because he failed to have regard to GOG and the Amazon App Store.
Fifth, whilst Professor Asker sought to draw attention to Steam’s headline rates, it is not in dispute that Steam offers discounts from its headline rates.
Faced with that reality, Professor Asker and Google sought to suggest that those discounts are limited. But the evidence establishes that prior to 2023 and throughout the relevant period there were no limits to the discounts offered by Steam.
Moreover, since at least November 2018, Steam has offered a 25% commission to developers with revenue between USD 10 million and 50 million, and a 20% commission rate to developers with revenue above USD 50 million.
These two factors mean that, as Mr Holt said and as the class applicants correctly contended, Steam’s effective rate is likely to be materially lower than 30%. Mr Holt was therefore correct not to extend his counterfactual commission range to 30% by reason of Steam’s top headline rate.
Sixth, Professor Asker’s attempt to establish that the Play Store’s service fee is comparable to and often lower than that of Steam has no foundation. Professor Asker purported to establish this proposition by examining a sample set of US-based developers that published on the Australian Play Store in 2021. He relied on this evidence to suggest that the vast majority of developers pay less fees on the Play Store than on Steam.
But there is no evidence that this is a representative sample. Further, Professor Asker only accounted for headline rates on both Steam and the Play Store. He also attributed to the Play Store’s rates a 15% rate for all apps and in-app purchases revenue less than USD 1 million. This is despite the fact that the data on which he relied related to 2021, and Google’s small business developer program which introduced the 15% rate for revenue less than USD 1 million only commenced in July of that year. So, Professor Asker incorrectly applied the 15% rate to the entirety of the 2021 year, skewing Google’s average fee lower than it was.
Let me identify other difficulties with Google’s submissions regarding Steam’s commission rates, as the class applicants have identified.
First, Google says that it makes no sense to focus only on Steam’s lowest rate offered to the small minority of developers with revenues over USD 50 million. But this criticism reflects Google’s failure to grasp the concept of an effective commission rate.
It is the revenue earned and commissions paid by developers that is the relevant integer for the purpose of assessing Steam’s effective commission rate. Large developers earning significant revenues are highly relevant to effective commission rates. This is apparent from both Apple’s and Google’s effective commission rates during the relevant period, which were between 29.1% and 26.6%, in the case of Apple, and 29.8% and 28.5%, in the case of Google, notwithstanding that a significant number of their developers are eligible to pay a 15% commission.
Second, Google alleged an error in Mr Holt’s reasoning regarding Steam’s headline commission rates that it says was exposed during cross-examination. Google says that Mr Holt incorrectly believed that Steam charged a 20% flat commission for developers with revenues above USD 50 million, when in fact Steam charges a 30% commission to all developers on the first USD 10 million of revenues earned on Steam, a 25% commission on revenues between USD 10 million and USD 25 million, and a 20% commission on revenues above USD 50 million. But the point goes nowhere.
Google cross-examined Mr Holt on a part of his reply report, but Mr Holt’s primary expert report regarding Steam discussed the progressive nature of Steam’s headline commission rates. Steam lowered its prices for large developers in November 2018. It retained the 30% commission on all revenue under USD 10 million, but reduced it to 25% for revenue between USD 10 million and USD 50 million and to 20% for revenue over USD 50 million.
Further, the substance of Mr Holt’s evidence was that Steam offers a lower headline commission rate, being 20%, to developers of titles for which Steam faces the most competitive pressure on commission rates, which are also the developers with the greatest ability and incentive to distribute directly, and the developers that have the greatest bargaining power. That evidence is unremarkable.
In any event, Mr Holt said that while Steam’s headline commission rates are relevant to his assessment of the counterfactual commission, he considered them alongside the overall market evidence in the round, including negotiations with developers that go beyond headline rates and the prevalence of direct distribution.
Mr Holt said that Steam’s rates are one indication of how competition might arise. It is only one of the many dimensions over which he would expect competition to take effect.
Third, Google relies on Professor Asker’s evidence to support its claim that the Play Store’s commission rates appear to be lower than Steam’s for the vast majority of developers who pay a commission to Google. Google says that Professor Asker estimated that 99.6% of developers who pay a commission to Google would have a lower commission on the Play Store than on Steam, and found that there would be a 1% difference between the average commission rate that developers paid to Google versus what they would have paid to Steam.
But as Google acknowledged, Professor Asker derived his estimate by applying Steam’s headline commission rates to the global revenues earned by US-based developers that publish on the Australian Play Store and earned revenues via the Play Store in 2021.
Accordingly, Professor Asker’s evidence said nothing about the commission rates that developers in fact pay to Steam or Steam’s effective commission rate.
It also said nothing about the position of developers not included in his sample of US-based developers.
Further, Professor Asker’s analysis was limited to the year 2021. It therefore also said nothing about the first 3 years of the relevant period, including the period before 1 July 2020, when Google reduced its service fee from 30% to 15% for the first USD 1 million earned each year by each developer.
Google’s suggestion that Professor Asker’s analysis somehow means that 99.6% of group members would get zero in these proceedings is wrong.
Fourth, Google says that Steam charges a 30% commission rate to all developers on the first USD 10 million of revenues they earn on Steam. That assertion is unsafe for the reasons discussed above.
For these reasons, Professor Asker’s calculations are unreliable and must be disregarded, along with any contention that Google’s average fee at any time during the relevant period was equal to or lower than that of Steam.

Let me move to the China context.
Professor Asker’s approach – is China relevant?
Professor Asker said that the counterfactual commission can be determined by benchmarking against the commission rate charged by Android app stores in a different region, China, where the contravening conduct has not been present. Indeed, in the concurrent session, and consistently with the case opened by Google, Professor Asker went so far as to suggest that Google app stores in China were a more useful comparator than the PC app distribution market.
Now I agree with the class applicants that there were several difficulties with Professor Asker’s use of the commission rates in China; indeed, of all the impressive evidence that Professor Asker gave before me on many topics, his use of Chinese rates was a low point.
Professor Asker’s benchmarking against commission rates in China assumed that the Chinese market for Android app distribution is comparable to that in Australia in all relevant respects save for the absence of the contravening conduct. But there are aspects of the Chinese market for Android app distribution which are idiosyncratic to China and which render that analysis of doubtful probative value to say the least, as the class applicants explained.
As Google itself recognises, Android in China is a parallel universe. As a consequence of Google’s absence, app distribution services in China are primarily provided by OEM device manufacturers that operate and pre-install their own app stores and actively divert users to those stores, such as Xiaomi and Huawei. OEMs also impose technical restrictions on the download of third-party app stores, restricting the capacity of those third-party stores to compete. This conduct is analogous to at least some of the contravening conduct.
This is a significant difference between the Chinese Android market and the counterfactual in Australia. If the Play Store was present in China, OEMs would have an incentive to ensure their systems were compatible with the Play Store. The absence of the Play Store from the Chinese Android market is clearly relevant to Professor Asker’s China analysis.
Professor Asker’s benchmarking against commission rates in China assumed that the Chinese market for Android app distribution would have been comparable to that in Australia in the counterfactual. Professor Asker said that the Chinese market is a reliable comparator because it is competitive. But that proposition has not been established on the evidence. Government intervention in the Chinese market suggests that it is highly unlikely that it is a competitive market.
Indeed, in response to concerns I raised that the Chinese comparison was contaminated by government regulation or government interference, Professor Asker conceded that he did not dispute at all that the Chinese government has an interest in all sorts of mobile architecture.
Despite this, Professor Asker accepted that he had not considered in his reports various aspects of government interference and regulation in the Chinese market, including the requirement for app stores to be licensed.
The regulatory framework faced by technology companies in China differs from that in Australia, including by reason of the so-called Great Firewall, which restricts users’ access to content, and regulatory measures which limit foreign companies’ access to the Chinese market in favour of local entities.
Similarly, the cost structure of operating an app store, including due to licensing and censorship requirements imposed by the Chinese government, differs from that in other jurisdictions, including Australia.
Moreover, there is evidence of relatively weak enforcement of intellectual property rights in China, which further reduces incentives for app stores to compete for developers in circumstances where apps can be scraped or cloned from other stores.
When this was put to Professor Asker in cross examination, he admitted to being aware of scraping in the Chinese market as it was mentioned in a presentation on China referred to extensively in his evidence. Moreover, he accepted that it would be implausible to assume that, in the counterfactual, app stores would copy, without developers’ authorisation, apps from other app stores. Yet, by drawing an analogy with China without accounting for the effect of scraping and cloning in that market, that is the implied assumption that Professor Asker made.
The realistic possibility that these features of the Chinese market have a causal relationship with the commission rate charged in that jurisdiction renders his China benchmarking analysis unreliable.
Further, Professor Asker’s analysis failed to grapple with the distortionary effect of Play Store’s absence from the Chinese market. The Play Store and other GMS apps have been blocked form China since 2010.
In all the circumstances, Professor Asker’s suggestion that based on Android in China, the counterfactual world Mr Holt proposed would likely be associated with higher service fees, rather than lower service fees, is not made good.
Summary
The difficulties with the benchmarking approaches adopted by Professor Asker lend themselves to the conclusion that they are not reliable measures by which to calculate the commission in the counterfactual. Contrastingly, the method put forward by Mr Holt is the most reliable means of measuring the counterfactual commission rate.
Generally speaking and notwithstanding its imprecision, the comparator analysis performed by Mr Holt does tend to have some merit.
The counterfactual commission — Google context
The class applicants say that absent the contravening conduct, the counterfactual commission would be in the range of 10% to 20%.
They say that adopting the conservative assumption that the size of the Android mobile app distribution market would remain the same following new entry absent the contravening conduct, the Play Store would remain profitable charging a commission of more than 10% and with a market share as low as 25%.
Whilst Google imposed different commission rates for different types of transactions at different points during the relevant period, Mr Holt calculated the effective commission rate for paid apps worldwide as ranging between 26.3% to 30% and for in-app purchases in Australia as ranging between 25.9% to 29.9%.
The difference between the effective commissions paid by Dark Ice and Android and app developer group members during the relevant period and the counterfactual commissions represents the extent of the overcharge obtained by Google by reason of the contravening conduct, being commissions paid by the second applicant and Android app developer group members, which would not otherwise have been paid by them.
The class applicants say that in all of the circumstances, a competitive level of commission in a competitive Android mobile app distribution market would be in the range of 10% to 20%, with a midpoint of 15%, being the counterfactual commission. Google is not alleging that the counterfactual commission rate during the relevant period should be reduced by reason that the contravening conduct occurred prior to the relevant period.
They say that the extent of the overcharge imposed by Google is the difference between the counterfactual commission and its effective commission during the relevant period.
The overcharge imposed by Google on Android app developers equates to the difference between the effective commission rate imposed by Google and the rate that Android app developers would have paid, but for the contravening conduct.
Now Google criticises Mr Holt’s evidence for failing to provide a basis to estimate the counterfactual commission having regard to only a subset of Google’s contravening conduct. I tend to agree with Google on this aspect and will need to hear further from counsel. At this stage I am not in a position to properly analyse Mr Holt’s 10% to 20% range. His analysis will need to be modified to address the actual contravening conduct of Google that I have found, and the significance of its absence in any applicable counterfactual scenario.
But notwithstanding, let me briefly touch on a few points.
The Play Store commission in the actual is not competitive
Now Professor Asker suggests that the Play Store commission in the actual is competitive on the basis that, while Google has made UCB and DOB available in some jurisdictions, there has been little take-up of these options.
Professor Asker asserts on this basis that the Play Store is offering a competitively priced, high-quality billing solution and the removal of the contravening conduct would have no positive effect for Android developers. But I agree with the class applicants that the argument is flawed.
As Mr Holt observed, to the extent that the rebate offered by Google through UCB and DOB is lower than the cost to developers to employ alternative payment solutions providers, the total cost to developers of using those alternatives will be higher than if the developer continues to use Google Play Billing.
Indeed, Google’s own internal modelling shows that the cost to Google, let alone third-party providers, of providing Google Play Billing ranges from 3.7% to 6.1%. Some modelling suggests costs as high as 7.5%.
As the class applicants say, and as I have indicated elsewhere, it is likely that the cost to developers of using third-party providers will be higher still, since there will be additional costs associated with integration of third-party billing providers into the Play Store and app infrastructure.
Comparator analysis — payment solutions
Now as the class applicants have said, a number of other alternative payment solutions providers already offer payment solutions that have equivalent functionality to Google Play Billing, and, but for the contravening conduct, would have presented an alternative option to Google Play Billing.
Mr Holt calculated a hypothetical effective commission rate from the fee structures of the alternative payment solution providers, applied to the average value of paid transactions on the Play Store during the relevant period, of between 2.2% and 9.62%, with most providers sitting between 4% and 5.5%.
Mr Holt concluded that, in his opinion, the portion of the commission charged for purchases made via the Play Store and attributable to its payment solution would have been in the range of 2.2% to 10% of the relevant purchase, with the central scenario likely to be 4% to 5%.
I am not in a position at this stage to properly address this.
Is the counterfactual commission calculated by Mr Holt arbitrary?
For reasons similar to what I said in the Apple context, Mr Holt did not take an arbitrary approach at the level warranting Google’s criticisms. Of course any approach taken in one sense would always have an element of arbitrariness associated with it.
Is there a single answer concerning overcharge that applies to all apps?
Google has made the following observations with which I agree.
It is unclear whether the conduct that I have found affected all types of apps in the same way, including all apps developed by developer group members, such that it can be concluded not only that overcharging in fact occurred, but that it occurred in respect of all apps, and thereby impacted upon all types of developers and app users.
And it is unclear whether this effect was the same across all apps, so that it is appropriate for me to arrive at a single answer in relation to overcharge which applies equally to all types of apps, developers and app users. The commissions payable by developers vary depending on their circumstances and have varied over time. I will need to hear further from counsel.
Summary
I do not propose to deal further with the counterfactual commission and overcharge questions at this time. I will need to hear further from counsel. These questions and their resolution need to be more focused and to take into account the actual contraventions that I have found against Google.
Conclusion
In both class actions in my view the commissions payable by developers would likely have been materially less absent the contravening conduct of Apple and Google that I have found, that is, in any applicable counterfactual scenario.
But at this stage I am not in a position to quantify the difference between the commissions actually paid and the commissions that would have been paid in any applicable counterfactual scenario.
As I say I will need to hear further from counsel.

I certify that the preceding eight hundred and sixty (860) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Beach.
Associate:
Dated: 12 August 2025

File numbers:	VID 341 of 2022 VID 342 of 2022
Judgment of:	BEACH J
Date of judgment:	12 August 2025
Catchwords:	COMPETITION LAW — representative proceeding against Apple by developers and users — representative proceeding against Google by developers and users — group members’ claims for overcharge — digital technology — Apple mobile devices — Android mobile devices — operating system software — smart phones — tablets — personal computers — native apps — web apps — web browsers — Apple’s App Store —Google’s Play Store — downloading apps — installing apps — app developers — access to platforms — two-sided platforms — platform operators — distribution services market — market for payment services — Apple and Google restrictive conduct in distribution market and payments market — imposition of restrictive contractual conditions — substantial lessening of competition — contraventions of s 46 of the Competition and Consumer Act 2010 (Cth) — alleged contraventions of ss 45 and 47 —unconscionable conduct — alleged contravention of s 21 of the Australian Consumer Law — counterfactual commissions in the absence of contravening conduct — overcharge of commission by Apple — overcharge of commission by Google — consequential relief
Legislation:	Competition and Consumer Act 2010 (Cth) ss 45, 46, 47, 82, 87, sch 2 ss 21, 236, 237 Federal Court of Australia Act 1976 (Cth) Pt IVA
Cases cited:	Australian Competition and Consumer Commission v Cement Australia (2017) 258 FCR 312 Barnes v Forty Two International Limited (2014) 316 ALR 408 Berry v CCL Secure Pty Ltd (2020) 271 CLR 151 Generic Health Pty Ltd v Bayer Pharma Aktiengesellschaft (2018) 267 FCR 428
Division:	General Division
Registry:	Victoria
National Practice Area:	Commercial and Corporations
Sub-area:	Economic Regulator, Competition and Access
Number of paragraphs:	860
Dates of hearing:	15, 18 to 21, 25 to 28 March, 2 to 4, 8 to 11, 15 to 18, 22 to 24, 29, 30 April, 1, 2, 6 to 9, 13 to 16, 20 to 23, 27 to 30 May, 3 to 7, 11 to 14, 17 to 20, 24 to 28 June, 1 to 5 July 2024
Counsel for the Applicants in VID 341 of 2022:	Mr A J L Bannon SC, Mr N De Young KC, Ms K Burke, Mr D Preston, Mr B Ryde and Dr S Chordia
Solicitor for the Applicants in VID 341 of 2022:	Phi Finney McDonald and Maurice Blackburn
Counsel for the Respondents (Apple parties) in VID 341 of 2022:	Mr M J Darke SC, Mr S Free SC, Mr C Bannan, Ms Z Hillman, Ms L Thomas, Ms X Teo and Mr B Lim
Solicitor for the Respondents (Apple parties) in VID 341 of 2022	Clayton Utz
Counsel for the Applicants in VID 342 of 2022:	Mr A J L Bannon SC, Mr N De Young KC, Ms K Burke, Mr D Preston, Mr B Ryde and Dr S Chordia
Solicitor for the Applicants in VID 342 of 2022:	Phi Finney McDonald and Maurice Blackburn
Counsel for the Respondents (Google parties) in VID 342 of 2022:	Mr C A Moore SC, Mr R A Yezerski SC, Mr P J Strickland, Ms C Trahanas and Ms W Liu
Counsel for the Respondents (Google parties) in VID 342 of 2022 (confidentiality issues only):	Ms E N Madalin and Mr A Hanna
Solicitor for the Respondents (Google parties) in VID 342 of 2022:	Corrs Chambers Westgarth

ORDER MADE BY:	BEACH J
DATE OF ORDER:	12 AUGUST 2025