Epic’s in the EU could be in serious jeopardy. Apple terminated the company’s developer account just one day after for third-party app stores in Europe to comply with the Digital Markets Act (DMA). Epic says that, thanks to the ban, it “cannot develop the Epic Games Store for iOS” and called the move a “serious violation of the DMA.” In other words, the
The Fortnite developer published a blog post on the matter and shared a letter sent by Apple’s lawyers that called Epic Games “verifiably untrustworthy,” suggesting the reason behind the ban was due to fear on Apple’s part that Epic would not comply with the contractual agreements inherent to obtaining a developer’s account. It’s worth noting that Apple , so the company didn’t have any compliance fears back then.
Apple’s plan to thwart Europe’s new Digital Markets Act law is a devious new instance of Malicious Compliance.
They are forcing developers to choose between App Store exclusivity and the store terms, which will be illegal under DMA, or accept a new also-illegal anticompetitive…
— Tim Sweeney (@TimSweeneyEpic) January 25, 2024
So what changed? Epic Games CEO Tim Sweeney has been particularly vocal regarding calling them “a devious new instance of malicious compliance.” Sweeney says that Apple technically complies with the DMA, but severely undercuts third-party app stores in a number of ways, calling it an “anticompetitive scheme rife with new junk fees on downloads and new Apple taxes on payments they don’t process.”
These claims aren’t entirely without merit, although Sweeney and his company are far from disinterested parties.”Third-party app stores must meet Apple’s Notarization requirements, with all of its tight rules regarding moderation, piracy, fraud and payment disputes. Apple has the right to shut down any app if it finds anything that skirts these rules. Additionally, developers must pay a once an app has been downloaded more than a million times, which breaks down to around 54 cents per install each year. Would-be developers must also share a letter from a top financial institution with proof it has access to at least $1.1 million in credit to handle potential financial disputes. There’s also a flat commission on every transaction, which ranges from 15 to 30 percent.
After about the new app store rules, Apple’s Phil Schiller sent Epic Games an email on February 23 to ask for “written assurance” that the company would honor its commitments. “In plain, unqualified terms, please tell us why we should trust Epic this time,” the letter concludes.
Sweeney responded that “Epic and its subsidiaries are acting in good faith and will comply with all terms of current and future agreements with Apple, and we’ll be glad to provide Apple with any specific further assurances on the topic that you’d like.” This didn’t seem to satisfy Apple, as it went on to pull the developer’s account this week.
Epic responded that the move undermines its “ability to be a viable competitor” and that Apple’s “showing other developers what happens when you try to compete” or are “critical of their unfair practices.” The developer calls the ban a simple retaliation “against Epic for speaking out against Apple’s unfair and illegal practices.”
Apple has a different take on things. It laid the blame on “Epic’s egregious breach of its contractual obligations” in a The iPhone manufacturer went on to say it has “the right to terminate any or all of Epic Games’ wholly owned subsidiaries, affiliates, and/or other entities under Epic Games’ control at any time and at Apple’s sole discretion. In light of Epic’s past and ongoing behavior, Apple chose to exercise that right.”
Despite all of this bad blood, the developer still plans on bringing Fortnite to iOS, likely via an unaffiliated third-party storefront. It’s also for the Unreal Engine to Apple Vision Pro.
Today’s development involves the DMA, a law that designates large companies as “gatekeepers” and specific services, like Apple’s App Store, as “core platform services.” The law forces these services to become interoperable with competing products to remain in compliance. This is why Apple’s allowing third-party app stores in the first place.
However, the bad blood between the two companies goes back years, long before the DMA was a glint in the EU’s eye. Epic Games has been fighting against Apple’s developer transaction fee policy since 2020, taking an antitrust case California’s Ninth Circuit ruled in favor of Epic, stating that Apple had broken the state’s Unfair Competition law, SCOTUS declined to so that’s where it stands right now. The Department of Justice, however, is against Apple.
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