Apple escalated its feud with Epic Games on Wednesday, blocking the Fortnite video game maker from launching its own online marketplace on iPhones and iPads in Europe.
The two companies have been in a legal battle since 2020, when the gaming company claimed that Apple’s practice of charging up to 30% commissions on in-app payments on iPhone (iOS) devices violated US antitrust rules.
The latest challenge from Epic comes as Apple grapples with concerns about tepid demand for its iPhones in China, with its shares down 12% so far this year, underperforming its major US tech peers. Its shares were largely unchanged on Wednesday.
Attempts by regulators and competitors like Epic to pave the way for competitive markets on Apple’s devices are a major threat to Silicon Valley heavyweights’ profits and control of their own ecosystem.
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European lawmakers are forcing Apple to allow these third-party marketplaces through a law called the Digital Markets Act (DMA) that takes effect this week.
Separately, antitrust regulators in Brussels fined Apple 1.84 billion euros ($2 billion) on Monday for preventing competition from music streaming rivals through restrictions on the App Store, Apple’s first fine for violating EU rules.
Epic has been working to take advantage of DMA, but Apple blocked those efforts on Wednesday, citing Epic’s past contract violations in a long-running legal dispute.
Apple has terminated the new developer account that Epic made in Sweden. Epic created the account in an effort to bring Fortnite and other games back to the iPhone in Europe by launching its own game store on Apple devices. Apple must allow third-party stores on its devices, according to a new European law.
Developer accounts are important because software creators can’t distribute apps to iPhone and iPad without one. Apple previously terminated some of Epic’s developer accounts in 2020, after Epic deliberately violated Apple’s in-app payment policies, using its violation and subsequent expulsion from the App Store as the centerpiece of a public relations and legal campaign against Apple.
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Apple said Wednesday that court rulings made it clear that it had “sole discretion” to terminate any Epic Games developer account in light of its “egregious” violations of the company’s developer contracts.
“In light of Epic’s past and ongoing conduct, Apple has decided to exercise that right” to terminate Epic Games’ account, Apple said.
Epic claimed that by terminating its account, Apple removed one of the biggest potential competitors to the Apple App Store.
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“This is a serious violation of the DMA and shows that Apple has no intention of allowing real competition on iOS devices,” Epic Games said.
The European Commission, the EU’s executive body, did not immediately respond to a request for comment.
In January, Apple proposed certain changes ahead of a March 7 deadline to comply with certain terms of the DMA, legislation that should make it easier for European users to move between competing services.
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The company said it would allow alternative app stores on iPhones and opt-out of in-app payment systems, but set a “basic technology fee” of 50 eurocents per user account per year for developers who sign up for the new regime.