Apple has blocked Fortnite maker Epic Games from launching its own iOS store in the EU

Apple escalated its feud with Epic Games on Wednesday, blocking the Fortnite video game maker from launching its own online iPhone and iPad marketplace in Europe.

The two companies have been in a legal battle since 2020, when the gaming firm claimed that Apple’s practice of charging up to 30 percent commissions for in-app payments on its iPhone operating system (iOS) devices violated US antitrust rules.

Epic’s latest challenge comes as Apple grapples with concerns about weak demand for its iPhones in China, and its shares have tumbled 12 percent so far this year, underperforming its major U.S. tech rivals. Its shares were largely unchanged on Wednesday.

Attempts by regulators and rivals like Epic to pave the way for competing markets for Apple’s devices are a major threat to Silicon Valley’s profits and control over its own ecosystem.

European lawmakers are forcing Apple to allow these third-party marketplaces with a law called the Digital Markets Act (DMA), which takes effect this week.

Separately, antitrust regulators in Brussels on Monday fined Apple 1.84 billion euros ($2 billion, or roughly Rs 16,547 crore) for thwarting competition from music streaming rivals by restricting its App Store, Apple’s first penalty for violating EU rules.

Epic has been working to take advantage of DMA, but Apple blocked those efforts on Wednesday, citing Epic’s past contract violations in the long-running legal dispute.

Apple has terminated a new developer account created by Epic in Sweden. Epic created the account in an attempt to bring Fortnite and other iPhone games back to Europe by running its own game store on Apple devices. Under the new European law, Apple must allow third-party stores on its devices.

Developer accounts are important because software creators can’t distribute apps on iPhone and iPad without one. Apple had previously terminated some of Epic’s developer accounts in 2020 after Epic deliberately violated Apple’s in-app payment policies, using the policy violation and subsequent expulsion from the App Store as the core of its public relations and legal campaign against Apple.

Apple said Wednesday that court rulings make it clear that it has “sole discretion” to terminate any Epic Games developer account in light of “egregious” violations of the company’s developer agreements.

“In light of Epic’s past and ongoing conduct, Apple has chosen to exercise this right” to terminate the Epic Games account, Apple said.

Epic claims that by terminating its account, Apple is removing one of the biggest potential competitors to the Apple App Store.

“This is a serious DMA violation and shows that Apple has no intention of allowing true competition on iOS devices,” Epic Games said.

The European Commission, the EU’s executive body, did not immediately respond to a request for comment.

In January, Apple proposed some changes ahead of the March 7 deadline to comply with certain terms of the DMA, legislation designed to make it easier for European consumers to switch between competing services.

The company said it would allow alternative iPhone app stores and opt-out of the in-app payment system, but set a “basic technology fee” of 50 euro cents per user account per year for developers who sign up for the new regime.

© Thomson Reuters 2024