The European Union has confirmed it is reviewing Apple’s decision to close Epic Games’ developer account — citing three different regulations that may apply.
Yesterday, the Fortnite maker revealed that Apple had terminated the account, apparently reversing the decision to approve the developer account last month.
Epic had planned to launch its own app store, Epic Games Stores, on iOS in Europe, as well as relaunching Fortnight on Apple’s platform. And it accused Apple of violating the bloc’s Digital Marketing Act (DMA) by killing its developer account.
Responding to the development, a spokesperson for the European Commission told TechCrunch that it has “requested further explanations on this from Apple in the context of the DMA.”
The EU-wide regulation applies to Apple from midnight Brussels time today.
The spokesman also said the EU is assessing whether Apple’s actions raise “doubts” about compliance with two other regulations — the Digital Services Act (DSA) and the Platform-to-Business (P2B) Regulation — given what they described as “the links between the developer program membership and the App store as a qualified VLOP” (aka very large online platform).
Rules applicable to the EU DMA for Apple, as a designated “gatekeeper,” and its App Store, as a so-called “core platform service,” require the company to allow third-party app stores. Failure to comply with the DMA carries severe penalties — up to 10% of global annual turnover (or 20% for repeat offenders).
While a subset of the rules in the DSA, which also apply to Apple’s App Store as a designated VLOP, apply to larger platforms from August 2023 — with the rest of the regulation’s provisions applying to platforms and many more digital services from last month. Penalties for violations of the DSA can be as high as 6% of global annual turnover.
The EU P2B Regulation, meanwhile, contains measures aimed at enhancing platform transparency and curbing unfair practices. Valid for a longer period (from 2020).
Under the P2B Act, sudden and unexpected account suspensions are prohibited, with platforms required to provide clear reasons for terminations. However, unlike the DMA and the DSA regime for VLOPs, P2B enforcement is not the Commission’s responsibility. It is left to authorities at Member State level, which also determine any possible penalties for infringements. Although it is possible that Commission enforcers will factor in whether platforms play well with the P2B rules as part of their assessment of VLOPs’ DSA compliance, given that there is some overlap in scope.
Epic claimed that Apple closed its developer account in retaliation for its criticism of the iPhone maker’s DMA proposal, which requires developers to sign up to new Terms and Conditions that include a new “core technology” in order to take advantage of DMA rights, as “Malicious Compliance”. .
Yesterday, Apple issued an aggressive statement in response – responding to Epic’s accusations and citing a US court ruling as justification for terminating her account. He also claimed that no executive had reviewed Epic’s application to Apple’s Developer Program License Agreement, suggesting it was done through a pay-per-view deal.
“Epic’s flagrant breach of its contractual obligations to Apple has led the courts to determine that Apple has the right to terminate ‘any or all Epic Games’ wholly owned subsidiaries, affiliates and/or other entities under control of Epic Games at any time and in Apple’s sole discretion.” In light of Epic’s past and ongoing conduct, Apple has chosen to exercise this right,” Apple wrote yesterday, citing a September 2021 US court ruling on Epic’s lawsuit against Apple. The game maker sued Apple in the US, claiming it abused its market power by forcing companies to use its own payment systems.
In September 2021, the US court ruled that Apple does not have a monopoly on mobile digital game transactions. Although it ordered not to prohibit developers from adding links in their apps to direct users to alternative payment systems outside the App Store for the purchase of digital goods.
At the time, Apple trumpeted the ruling as a victory — saying 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 DMA, Apple is required to allow third-party app stores and third-party software downloads. and should not prevent business users from offering products through their own channels.
The US court ruling that Apple is citing to justify the termination of Epic’s developer account is unlikely to have effect in the EU. However, Apple may be looking to play one legal jurisdiction against another – which has decided that its in the market is a problem and has already passed laws regulating how its App Store operates.
Apple contacted in response to the Commission’s request for further explanation of its actions under the DMA and the doubts raised by the block about its compliance with other measures applied to the App Store by DSA and P2B. She said she had nothing more to add to the remarks she made yesterday — which argued that the US court’s decision upheld her contractual right to terminate Epic’s account.
In those remarks, Apple noted that Epic’s account termination is not limited to the EU. It said that Developer Program License Agreements (DPLAs) are global agreements. alleged breach of the DPLA Agreement by Epic (through its Hotfix patch. which tried to circumvent Apple’s rules by secretly developing code that allowed users to buy in-game currency) was also implemented worldwide, including in Europe. and suggested that the injunction allowing the complaint has universal application.
The company also noted that Epic continues to fight against it in the US and Australia.
