On Wednesday, Apple intensified its ongoing dispute with Epic Games by preventing the Fortnite developer from establishing its own online marketplace on iPhones and iPads across Europe.
The conflict between the two companies dates back to 2020, when Epic Games accused Apple of violating US antitrust laws due to its commission rates, which can be as high as 30 percent on in-app purchases within its iPhone Operating System (iOS).
This latest move from Epic emerges as Apple faces diminishing demand for its iPhones in the Chinese market. The company’s stock has decreased by 12 percent this year, significantly lagging behind other major tech firms in the United States. On Wednesday, its share price remained relatively stable.
Efforts from competitors like Epic Games and regulatory bodies to introduce alternative marketplaces on Apple’s devices pose a significant risk to the tech giant’s profits and the control it has over its ecosystem.
Under the provisions of the Digital Markets Act (DMA), which comes into effect this week, European lawmakers are compelling Apple to permit third-party marketplaces on its devices.
In an unrelated development, Brussels antitrust regulators imposed a fine of EUR 1.84 billion ($2 billion, about Rs. 16,547 crore) on Apple for hindering competition from music streaming services through restrictive practices in its App Store. This marked the first instance of Apple being penalized for violating EU regulations.
Epic Games aimed to leverage the DMA but faced setbacks after Apple blocked its initiatives on Wednesday, referencing past contract violations by Epic during their prolonged legal battle.
Developer accounts hold significant importance, as they are necessary for app creators to distribute applications to iPhones and iPads. Apple had previously terminated several of Epic’s developer accounts in 2020 after the company intentionally contravened Apple’s in-app payment policies, which later became central to Epic’s public relations and legal campaigns against Apple.
On Wednesday, Apple stated that judicial rulings have clarified its authority to terminate any developer account associated with Epic Games due to “egregious” violations of its agreements.
“Given Epic’s history and ongoing conduct, Apple opted to exercise its right to terminate Epic Games’ account,” the company noted.
Epic has claimed that the account termination effectively removes one of the major potential challengers to the Apple App Store.
The company described the action as a serious breach of the DMA, asserting that it highlights Apple’s unwillingness to foster genuine competition on iOS devices.
The European Commission, the EU’s executive arm, has not yet responded to inquiries seeking comment on the matter.
Earlier this year, Apple proposed modifications in advance of a March 7 deadline to comply with stipulations set by the DMA, a law intended to facilitate easier transitions for European users among competing services.
Among the changes, Apple indicated it would open up iPhones to alternative app stores and provide an option to bypass its in-app payment system but would impose a “core technology fee” of 50 euro cents per user account annually for developers participating under the new arrangement.
© Thomson Reuters 2024
