Tim Sweeney, CEO of Epic Games Inc., speaks during an interview in Seoul, South Korea, Tuesday, Nov. 16, 2021.

SeongJoon Cho | Bloomberg | Getty Images

An apple approved Epic Games’ developer account in Sweden, which will allow the company to offer a competing iPhone app store in Europe under a new antitrust regulation, the Digital Markets Act.

Earlier this week, Epic Games CEO Tim Sweeney said Apple retaliated against the company for lawsuits and social media criticism by blocking the account in Sweden, citing an email from Apple App Store chief Phil Schiller to Sweeney.

The episode was one of the first challenges to the European DMA by one of the tech giants it regulates, and raised questions about whether fines and penalties under the law would be enough to curb some of the practices targeted by the law. Apple’s quick turnaround suggests European regulators will be able to enforce the law.

“This sends a strong signal to developers that the European Commission will act quickly to enforce the Digital Markets Act and hold watchdogs accountable,” Epic Games said in a statement.

Apple’s App Store takes 30% of game purchases and 15% of most online subscriptions. Before the European DMA, this was essentially the only way to install apps on the iPhone. The new regulation forces Apple to allow third-party app stores on the iPhone in Europe, but Apple says it can charge half a euro per download, a pricing strategy that has drawn criticism from app developers.

European regulators immediately said after Epic’s announcement that they would press Apple for answers about the incident. On Friday, Sweeney said on social media that Apple had allowed Epic Games to launch the store after an inquiry by the European Commission.

Earlier this week, Sweeney said it was impressive that Apple continued to block the company’s developer account in Europe. Schiller, head of Apple’s App Store, wrote a letter to Sweeney asking if he would honor Apple’s contracts going forward — in light of the 2020 lawsuit — and Sweeney said yes. However, according to emails provided by Epic Games, an Apple lawyer rejected Sweeney’s statement and blocked Epic’s European account.

An Apple spokesperson confirmed that Epic Games’ account was reinstated after Epic told Apple it would follow its platform’s policies.

“After speaking with Epic, they have committed to following the rules, including our DMA policies. As a result, Epic Sweden AB was allowed to re-sign the developer agreement and was accepted into Apple’s developer program,” a spokesperson told CNBC in a statement.

Epic Games said it will use the account to publish Fortnite for iPhone in Europe, as well as its own Epic Games store.

The conflict between Epic Games and Apple dates back to 2020, when Epic Games updated the shooter Fortnite to circumvent Apple’s 30% cut of App Store sales. Apple has pulled Fortnite from its stores, and Epic is suing in the US to force Apple to open up its platform.

Epic almost lost the case, but won some concessions under California law.

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