Apple‘s conflict with Epic Games intensified this week, as it prevented the Fortnite creator from introducing its online store on Apple’s mobile devices in Europe.
This escalation is part of an ongoing legal struggle initiated in 2020, centered around Epic Games’ accusation that Apple’s in-app payment commissions of up to 30% on iOS devices breach U.S. antitrust regulations.
This development occurs amidst Apple grappling with diminished demand for its iPhones in China, contributing to a 12% decline in its stock value this year, marking a significant underperformance compared to its U.S. tech counterparts.
Despite these challenges, Apple’s shares remained stable on Wednesday.
Efforts by competitors like Epic and regulatory interventions aim to open Apple’s platform to alternative marketplaces, posing significant risks to Apple’s revenue and control over its ecosystem.
The Digital Markets Act (DMA), enforced this week in Europe, mandates Apple to accommodate these third-party platforms.
In addition to facing resistance from Epic, Apple was recently fined 1.84 billion euros by EU antitrust regulators for imposing competitive restrictions through its App Store, marking the company’s first penalty for violating EU regulations.
Apple countered Epic’s move to leverage the DMA by terminating a new developer account Epic had established in Sweden, intending to reintroduce Fortnite and other games on Apple devices via its own store, despite the DMA’s stipulations for third-party store allowances.
This action is rooted in ongoing disputes, with Apple previously canceling Epic’s developer accounts in 2020 for violating in-app payment guidelines.
Apple justified its decision, citing “sole discretion” to terminate any Epic Games developer account due to “egregious” contractual violations.
“In light of Epic’s past and ongoing behavior, Apple chose to exercise that right,” stated Apple.
Epic retaliated by asserting Apple’s account termination undermines significant competition against the Apple App Store, labeling it a “serious violation of the DMA” and accusing Apple of obstructing genuine competition on iOS devices. The European Commission has yet to comment on the situation.
In anticipation of the DMA’s implementation, Apple proposed adjustments to allow alternative app stores on iPhones and permit developers to bypass its in-app payments system, albeit with a “core technology fee” for developers opting into this new framework.