The European Union has confirmed that it is investigating Apple's decision to close Epic Games' developer account, citing three separate regulations that may apply.
Yesterday, the Fortnite maker revealed that Apple had terminated its account, seemingly reversing its decision to approve developer accounts last month.
Epic had planned to launch its own app store, Epic Games Stores, on iOS in Europe, as well as reboot Fortnight on Apple's platform. It accused Apple of violating the Digital Markets Act (DMA) by suspending developer accounts.
In response to this development, a European Commission spokesperson told TechCrunch: “We have requested further clarification from Apple on this matter under the DMA.”
The pan-EU regulations will apply to Apple from midnight Brussels time today.
The spokesperson also said Apple's actions raised “questions” about its compliance, given what it described as “relevance” to two other regulations: the Digital Services Act (DSA) and the Platform-to-Business Regulation (P2B). The EU is currently assessing whether this will result in Between membership in the developer program and the App Store as his designated VLOP (aka a very large online platform).
The EU's DMA rules governing Apple as a designated “gatekeeper” and the App Store as a so-called “core platform service” oblige the company to allow third-party app stores. If you fail to comply with the DMA, you risk significant fines of up to 10% of your global annual turnover (20% for repeat offenders).
While some of the DSA's rules also apply to Apple's App Store as a designated VLOP, and have been in effect for large platforms since August 2023, the remaining provisions of the rules have been in effect since last month for platforms and larger platforms. Applied to many digital services. . Fines for DSA violations can reach up to 6% of global annual revenue.
Meanwhile, the EU's P2B regulations include measures aimed at increasing platform transparency and curbing unfair practices. It has been in force for longer (from 2020).
P2B law prohibits sudden and unexpected account termination, and platforms must provide clear reasons for termination. However, unlike his VLOP regime in the DMA and DSA, P2B enforcement is not the responsibility of the Commission. This is delegated to authorities at member state level, who also decide on penalties for non-compliance. However, given the overlap in scope, it is likely that the Commission Enforcement Officer will take into account whether the platform is well aligned with his P2B rules as part of his DSA compliance assessment of his VLOP. there is.
Epic claimed that Apple terminated its developer account in retaliation for criticizing the iPhone maker's DMA proposal. The DMA proposal would require developers to sign up to new terms and conditions that include new “core technologies” to take advantage of DMA entitlements, which it says is “bad compliance.” .
Yesterday, Apple issued an aggressive statement hitting back at Epic's accusations and citing a US court ruling as justification for suspending the account. The company also claimed that none of its executives reviewed Epic's application for the Apple Developer Program license agreement, suggesting it was done through a click-through agreement.
“Due to Epic's material breach of its contractual obligations to Apple, the court concluded that Apple may not be able to 'remove any or all of Epic Games' wholly owned subsidiaries, affiliates, and/or other entities under Epic Games' control. ” at Apple's sole discretion. “In light of Epic's past and current actions, Apple has chosen to exercise its rights,'' Apple wrote yesterday, citing a September 2021 US court ruling regarding Epic's lawsuit against Apple. The game maker sued Apple in the US, accusing it of abusing its market power by forcing companies to use its own payment system.
In September 2021, a US court ruled that Apple does not hold a monopoly in digital mobile gaming transactions. However, the order does not prohibit developers from adding links to their apps to direct users to alternative payment systems outside of the App Store to purchase digital goods.
At the time, Apple touted the ruling as a victory, claiming the court had found the App Store did not violate antitrust laws. The US court also did not require Apple to allow third-party app stores or sideloading. However, under the EU's DMA, Apple must allow third-party app stores and third-party software downloads. Additionally, business users should not be prevented from offering products through their own channels.
The US court ruling that Apple cites to justify terminating Epic's developer account is unlikely to have standing within the EU. But Apple may be trying to pit one legal jurisdiction against another. Apple has decided that its market power is an issue and has already passed laws regulating how the App Store operates.
Apple will respond to the Commission's request for further clarification on its actions under the DMA and to the doubts raised by the European Commission regarding compliance with the DSA and other measures applied to the App Store by P2B. I asked for it and was contacted. The company said it had nothing further to add to its statement yesterday, saying the U.S. court ruling affirms its contractual right to terminate Epic's accounts.
In its remarks, Apple noted that Epic's account suspension is not limited to the EU. The company said the Developer Program License Agreement (DPLA) is a worldwide agreement. It also claimed that Epic's violation of the DPLA agreement (through a “hotfix” patch that sought to circumvent Apple's rules by secretly deploying code that forced users to purchase in-game currency) was also implemented around the world, including in Europe. He suggested that court injunctions authorizing dismissals would be applicable worldwide.
The company also noted that Epic continues to pursue lawsuits against it in the United States and Australia.