The introduction of Epic‘s own iOS storefront in the European Union may be seriously threatened. Within a single day of iOS 17.4 enabling third-party app shops in Europe to finally comply with the Digital Markets Act (DMA), Apple terminated the company’s developer account. As a result of the prohibition, Epic claims it “cannot develop the Epic Games Store for iOS” and referred to the action as a “serious violation of the DMA.” Or, to put it another way, the biggest tech feud persists.
The Fortnite developer addressed the issue on his blog and shared a letter from Apple’s legal team labeling Epic Games as “verifiably untrustworthy.” The developer implied that Apple banned Epic because they were afraid the company wouldn’t honor the agreements that come with getting a developer account. Remember that Apple gave Epic a developer account at the start of the year, thus at that time, the corporation had no concerns about compliance.
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 Apple’s EU App Store changes, 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 Core Technology Fee 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 Sweeney complained openly 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 statement published by 9to5Mac. 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 bringing experimental support 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 all the way to the Supreme Court. California’s Ninth Circuit ruled in favor of Epic, stating that Apple had broken the state’s Unfair Competition law, though it stopped short of calling Apple a monopoly. SCOTUS declined to hear appeals from both Apple and Epic, so that’s where it stands right now. The Department of Justice, however, is reportedly considering its own antitrust case against Apple.
