The companies have been locked in a legal dispute after Epic Games accused Apple of breaching U.S. antitrust regulations by imposing fees of up to 30% on in-app purchases made on its iOS devices
Apple intensified its feud with Epic Games on Wednesday by preventing the Fortnite gaming company from launching its own digital marketplace on iPhones and iPads in Europe.
Since 2020, the companies have been locked in a legal dispute after Epic Games accused Apple of breaching U.S. antitrust regulations by imposing fees of up to 30% on in-app purchases made on its iOS devices.
This recent move by Epic arrives at a time when Apple is facing challenges due to weakening iPhone demand in China, leading to a 12% decline in its stock value this year, trailing behind other major U.S. tech companies. However, Apple’s stock remained largely stable on the day of the announcement.
Efforts made by rivals like Epic and regulatory authorities to open doors for competing marketplaces on Apple’s devices represent a significant threat to the firm’s profits and tight grip on its market. European lawmakers are pushing Apple to allow these alternative marketplaces through legislation like the Digital Markets Act (DMA).
On Monday, the Brussels antitrust regulators issued a fine of 1.84 billion euros ($2 billion) to Apple for impeding competition from music streaming competitors through strict App Store rules. This marked Apple’s first penalty for EU rule violations. Subsequently, Apple thwarted Epic’s efforts to leverage the DMA citing previous contract breaches in their ongoing legal battle.
In an attempt to restore Fortnite and other games on iPhones in Europe, Epic set up a new developer account in Sweden. Nevertheless, Apple promptly terminated the account. With the new European law in place, Apple is obligated to allow third-party stores on its devices.
Having developer accounts is crucial for software developers as without them, they are unable to distribute their apps to iPhones and iPads.
In 2020, Apple terminated some of Epic’s developer accounts due to Epic’s intentional breach of Apple’s in-app payment regulations. This action by Apple was used by Epic as a central point in its public relations and legal battle against Apple.