The European Union has initiated an investigation into Apple’s decision to terminate Epic Games’ developer account, triggering concerns over potential violations of the Digital Markets Act, Digital Services Act, and Platform-to-Business Regulation.
This development comes after Fortnite developer Epic Games revealed that Apple had terminated its account, reversing its prior approval of the developer account just last month.
Epic Games had strategic plans to launch its own app store, the Epic Games Store, on iOS in Europe, alongside the relaunch of Fortnite on Apple’s platform. The termination of its developer account led Epic Games to accuse Apple of breaching the bloc’s Digital Markets Actby curtailing its developer account.
In response to these unfolding events, a spokesperson for the European Commission confirmed that it has sought further explanations from Apple under the DMA. This pan-European regulation, which became applicable to Apple from midnight Brussels’ time, imposes obligations on designated “gatekeepers” like Apple to permit third-party app stores. Failure to comply with the DMA could result in significant penalties, up to 10% of global annual turnover.
Additionally, the EU is evaluating whether Apple’s actions give rise to compliance doubts regarding two other regulations – the Digital Services Act (DSA) and the Platform-to-Business Regulation. The DSA, with certain provisions already in force since August 2023, imposes penalties of up to 6% of global annual turnover for breaches, applying specifically to very large online platforms (VLOPs) such as Apple’s App Store. The P2B Regulation, effective since 2020, aims to enhance platform transparency and curb unfair practices.
Epic Games alleges that Apple terminated its developer account as a form of retaliation for Epic’s criticism of Apple’s proposed DMA rules. Apple’s proposal requires developers to adhere to new terms and conditions, including accepting a new “core technology,” to access DMA entitlements. This move by Apple has been described by Epic as an act of “Malicious Compliance.”
Apple, in its response, issued a robust statement refuting Epic’s accusations and cited a US court ruling as the justification for terminating Epic’s account. The company asserted that Epic’s past and ongoing behavior, including breaches of contractual obligations, gave Apple the contractual right to terminate its account.
The EU’s investigation into Apple’s actions is of significant consequence, considering the potential implications for Apple’s compliance with DMA, DSA, and P2B regulations. The termination of Epic Games’ developer account may become a focal point in the ongoing debates about the power and influence of major tech platforms and their role in the app economy.
It is noteworthy that the US court ruling cited by Apple to justify the termination of Epic’s account may not carry the same weight in the EU. However, Apple’s attempt to play legal jurisdictions against each other could introduce a layer of complexity to the situation. Apple emphasizes the global applicability of its right to terminate Epic’s account, citing a September 2021 US court ruling related to Epic’s litigation against Apple. This ruling affirmed Apple’s contractual right to terminate entities under Epic Games’ control at its sole discretion.
The European Commission’s scrutiny of Apple’s actions will likely shed light on the interplay between global tech giants and regulatory frameworks designed to ensure fair competition, transparency, and user protection within the digital ecosystem. As the investigation unfolds, it may influence future discussions on the regulatory oversight of major platforms and their compliance with evolving legal frameworks in different regions.
