Today marks the day of European Union’s Digital Markets Act (DMA) going into effect, aiming to diminish the dominant position of Big Tech in the market by fostering competition. However, Apple found itself under scrutiny by EU regulators.
This attention comes in the wake of Apple terminating Epic Games’ iOS developer account, a move that has escalated the ongoing tussle between the tech giant and the video game developer.
Epic Games Faces App Store Exclusion
Epic Games, the developer behind the popular Fortnite game, disclosed that Apple had terminated its iOS developer account, complicating its plans to launch an alternative marketplace on iOS devices in the EU.
This marketplace was intended to be a direct competitor to Apple’s App Store, taking advantage of the DMA’s provisions that require tech companies to open their platforms to competitors. Fortnite has been absent from the iOS ecosystem since 2020 when Apple expelled it for circumventing its in-app purchase system, a move that avoided Apple’s commission fees.
Epic’s intention to reintroduce Fortnite on iOS was thwarted by this recent action from Apple, citing violations of its terms of service due to Epic’s previous attempts to bypass Apple’s payment systems.
Controversy Over Apple’s New Fee Scheme
The European Commission expressed concern over Apple’s decision, reflecting the regulatory body’s commitment to ensuring compliance with the new law:
- European Commission’s Reaction: Sought further explanations under the DMA guidelines due to Apple terminating Epic Games’ iOS developer account.
- Accusations of “Malicious Compliance”: Described by Epic Games CEO Tim Sweeney, referring to Apple’s resistance to the DMA’s mandates through controversial policies.
- Contentious Fee Scheme:
- Introduced by Apple for developers using alternative marketplaces.
- Potentially results in higher costs than the App Store’s traditional revenue-sharing model.
- Criticized for undermining the DMA’s objective of fostering competitive fairness.
- Critics Include Major Companies: Meta, Microsoft, Spotify, and Epic Games have voiced their disapproval of Apple’s approach.
How is the EU Responding to Apple’s Actions?
In response to the backlash, particularly concerning the proposed elimination of home screen web apps—a decision Apple later retracted—the EU has initiated a preliminary investigation into Apple’s termination of Epic Games’ developer account.
EU industry chief Thierry Breton emphasized that the DMA leaves no room for gatekeepers to silence developers, underscoring the importance of adhering to the principles of competition and fairness the DMA seeks to uphold.
As the EU evaluates Apple’s compliance with the DMA, along with other regulations such as the Digital Services Act (DSA) and the Platform to Business Regulation (P2B), the tech industry watches closely. These developments could have far-reaching implications for the business models of major tech platforms and the digital market’s competitive landscape.
Apple maintains its stance, highlighting its contractual rights in light of Epic’s violations, but the situation underscores the ongoing tension between tech giants and regulators striving to balance innovation with fair competition.
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Featured Image courtesy of Gonzalo Fuentes/REUTERS