Apple Faces Legal Setbacks in Australia, US, Europe Amid Strong Earnings

Apple Inc. has faced two significant setbacks recently, with legal challenges emerging from both Australia and the United States. The first blow came from the Australian Federal Court, which ruled that Apple and Google had engaged in anti-competitive behavior by abusing their market dominance in operating their app stores. This decision opens the door for Australian consumers and app developers to seek compensation. The court found that the companies' practices, which involve controlling the distribution and in-app payments of applications, had restricted competition. This ruling is expected to have a substantial impact on the operation of digital platforms in Australia.

Epic Games, the developer of the popular game Fortnite, celebrated a partial victory in its ongoing battle with tech giants. The company announced on X that the Australian court had found that Apple and Google had misused their control over app distribution and in-app payments to limit competition. Epic Games expressed that this decision would allow Epic Games Store and Fortnite to enter the Australian iOS market, benefiting both developers and consumers in the region. Apple and Google, however, have contested parts of the ruling, with Apple welcoming the dismissal of some claims but strongly opposing others. Google, while welcoming the dismissal of certain claims, disagreed with the court's description of its billing policies and historical partnerships.

In the United States, Apple has also faced legal challenges. In late April, a federal judge in California ruled that Apple had violated a previous court order by failing to promote market competition. The order required Apple to open its app store to external payment methods, stemming from a high-profile antitrust lawsuit filed by Epic Games in 2021. This lawsuit focused on Apple's monopoly over iOS app distribution. Additionally, Apple has encountered setbacks in Europe, where the European Commission fined the company 5 billion euros for violating the Digital Markets Act. France's competition authority also imposed a 1.5 billion euro fine on Apple for abusing its dominant position in device-targeted advertising.

Despite these legal challenges, Apple's financial performance remains robust. The company reported revenue of 940.36 billion dollars for the third quarter of its 2025 fiscal year, marking a 9.63% year-over-year increase. Net income also grew by 9.26% to 234.34 billion dollars. This financial strength suggests that Apple is weathering the legal storms relatively well, at least in the short term.

In a separate development, the world's wealthiest individual and CEO of Tesla has accused Apple of anti-competitive practices. The individual claimed that Apple's app store favors OpenAI's products, violating antitrust regulations. The individual's AI startup, xAI, has announced plans to take legal action against Apple. xAI, founded in 2023, recently launched its Grok 4 chatbot, which the individual claims is the most powerful AI model globally, capable of handling academic problems at a doctoral level. Grok 4 is now available for free to all users, with limited queries allowed per day before requiring a subscription.

Currently, Grok is ranked sixth in the "hot free apps" category on the U.S. iPhone app store, while ChatGPT holds the top spot. xAI has expressed concerns about potential bias in Apple's app store rankings, suggesting that the store favors established AI products over innovative challengers. The individual has shared these concerns on X, highlighting the importance of fair competition over political considerations. OpenAI's CEO responded to these allegations, expressing shock at the individual's statements and calling for an investigation into the individual's alleged manipulation of X for personal and corporate gain. OpenAI, however, remains focused on developing superior products.

OpenAI recently launched its GPT-5 AI model, which has received positive market feedback. As competitors in the AI industry, xAI faces significant challenges from OpenAI's GPT models. The individual has previously sued OpenAI in state and federal courts, accusing the company of violating its non-profit commitments by pursuing commercialization. The individual has also publicly criticized OpenAI's CEO, leading to a series of public disputes. Despite these tensions, both companies continue to innovate and compete in the rapidly evolving AI landscape.