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Apple Set to Be Quizzed by EU Over ‘Fortnite’ Maker Shutout

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(Bloomberg) — Apple Inc. will face questions from European Union regulators over accusations it barred Epic Games Inc. from opening its own app store for iPhone customers in Europe — the latest twist in a long-running fight between the two companies.   

Epic said that Apple had terminated its developer account on Wednesday, preventing the gaming company from bringing Fortnite and the Epic Games Store to Apple’s iOS devices in the EU. Epic chief executive officer, Tim Sweeney, accused Apple of violating the EU’s sweeping new Digital Markets Act rules, which take full effect Thursday. 

The move increases the prospect of another fractious legal battle between Apple and Brussels regulators, leading to the threat of heavy penalty, just days after the company was slapped with a €1.8 billion ($2 billion) EU fine for shutting out music streaming rivals.

An EU commission spokesperson confirmed it had requested further explanations from Apple concerning its conduct with Epic’s game developer account under the bloc’s DMA. The new regulation will force the likes of Alphabet Inc.’s Google Search, Apple’s App Store, Amazon.com Inc.’s marketplace and Meta Platforms Inc.’s Facebook to heed a strict list of do’s and don’ts — or face the threat of significant penalties. 

Fines for violating these rules can be as much as 10% of a company’s total annual worldwide revenue, and 20% for firms that repeatedly flout the rules.

The commission also said that it was examining whether Apple’s behavior may have fallen foul of other digital rules over transparency with business users. 

Epic’s developer account had already been banned by Apple in the US and elsewhere since 2020, when Epic bypassed Apple’s payment system to sell in-app upgrades to users. That set off a firestorm between the two companies, ultimately resulting in them going to court. Apple mostly prevailed, but was forced by a judge to make it easier for developers to point customers to outside payment methods for in-app purchases.

“Epic’s egregious breach of its contractual obligations to Apple led courts to determine that Apple has the right to terminate any or all of Epic Games wholly owned subsidiaries,” Apple said in a statement. “In light of Epic’s past and ongoing behavior, Apple chose to exercise that right.”

Apple is expected to come under fresh scrutiny after it announced an overhaul of its iOS, Safari and App Store offerings in the EU, which the European Commission is likely to investigate further to determine whether they fall in line with the rules.

In an interview with Bloomberg TV Tuesday, the European Union competition chief Margrethe Vestager said the bloc intends to focus on app stores after the new rules come into effect.

©2024 Bloomberg L.P.





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