Epic Games' Developer Account Rejected in Europe by Apple: Antitrust Allegations and Legal Battles Escalate

Apple has approved Epic Games' developer account in Sweden, allowing the company to offer a competing app store on iPhones in Europe under the Digital Markets Act. Epic Games CEO Tim Sweeney accused Apple of retaliating by blocking the Sweden account due to lawsuits and criticism, which was one of the first challenges to the European DMA. Apple's quick reversal of the decision suggests European regulators will enforce the law, signaling developers that the European Commission will act swiftly to hold gatekeepers accountable. Apple's App Store charges 30% of game purchases and 15% of most online subscriptions, being the primary way to install apps on iPhones before Europe's DMA. The new regulation mandates Apple to allow third-party app stores on iPhones in Europe, permitting Apple to charge half a euro per download, drawing criticism from app developers. European regulators plan to press Apple for answers about the incident, and Apple restored Epic Games' account after an inquiry by the European Commission. The conflict between Epic Games and Apple dates back to 2020 when Epic updated Fortnite to bypass Apple's 30% commission, resulting in Fortnite being removed from Apple's stores and a subsequent lawsuit. Epic Games plans to use the approved account to publish Fortnite for iPhones in Europe and its own Epic Games store. The European Union's Digital Markets Act has officially become enforceable, allowing action against companies that breach the rules. The Act aims to clamp down on anti-competitive practices and force tech giants to open up some services to competitors. The legislation impacts primarily U.S. tech giants like Google, Apple, Facebook (Meta), Amazon, and Microsoft. Six firms have been designated as gatekeepers: Alphabet, Amazon, Apple, Meta, Microsoft, and ByteDance. These gatekeepers must adjust their platforms to promote competition in the EU. Google, for example, must show alternative search engines on Android phones and Facebook Messenger must be interoperable with third-party messaging services. Apple has been fined for breaching competition rules related to its App Store practices. EU citizens will see changes like alternative app stores on iPhones, more search engine choices on Android phones, and more competition in app distribution. Concerns have been raised about the impact on smaller businesses like local hotels due to changes in search results and advertising formats. Epic Games' CEO, Tim Sweeney, announced that Apple has rejected their developer account application for launching an app store in Europe. Apple's decision is seen as retaliation for Epic Games' antitrust lobbying, lawsuit against Apple, and Sweeney's social media posts. Sweeney compared Apple's actions to a "medieval feudal lord." This is the first public instance of Apple denying competing app stores in Europe, potentially leading to increased scrutiny under new antitrust laws. Epic Games sued Apple in 2020 over Fortnite's compliance with App Store rules and revenue share, resulting in some policy changes under California law. The dispute reflects broader regulatory challenges to Apple's App Store profits and compliance with laws like the Digital Markets Act in Europe. Apple stated that Epic's breach of contractual obligations justified account termination. Apple's plans to comply with the new European law include allowing third-party app stores, but critics like Spotify claim Apple's proposed fees and rules do not align with the spirit of the law. Epic Games planned to launch a new app store in Europe, but Apple denied their developer account application, citing concerns about lobbying and manipulating legal proceedings. Sweeney expressed frustration with Apple's demands for loyalty and silence. The relationship between Epic Games and Apple remains contentious, with ongoing legal battles and regulatory pressures on Apple's App Store operations.