A direct observation of the giant Zeeman splitting of the free excitons in (Ga,Fe)N is reported. The magnetooptical and magnetization data imply the ferromagnetic sign and a reduced magnitude of the effective p-d exchange energy governing the interaction between Fe^{3+} ions and holes in GaN, N_0 beta^(app) = +0.5 +/- 0.2 eV. This finding corroborates the recent suggestion that the strong p-d hybridization specific to nitrides and oxides leads to significant renormalization of the valence band exchange splitting.
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