The EU has waded into the latest falling out between Epic Games and Apple, after Apple terminated Epic’s developer account for iOS, preventing the company from developing an Epic Games Store marketplace for iPhone.
On Wednesday, Epic Games released a scathing press release revealing that Apple had terminated its developer account in what Epic called a “serious violation of the DMA.” Correspondence published by the company reveals Epic Games was denied a consultation with Apple over the Digital Markets Act changes added to iPhone in iOS 17.4. An email from Apple's Phil Schiller to Epic CEO Tim Sweeney revealed the company had deep reservations about Epic’s trustworthiness, noting it had previously intentionally broken its agreements with Apple “to make a point and for financial gain.” Schiller also cited Sweeney’s outspoken public criticism of Apple’s compliance with the DMA, which Sweeney described as "hot garbage".
Now, the EU says it has requested an explanation from Apple as to why Epic Games Sweden’s developer account was terminated, a move Apple says it had every right to make.
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As reported by Reuters, the European Commission has confirmed “We have requested further explanations on this from Apple under the DMA (Digital Markets Act)” and is “also evaluating whether Apple's actions raise doubts on their compliance with the DSA (Digital Services Act) and the P2B (Platform to Business Regulation), given the links between the developer programme membership and the App store as designated VLOP (very large online platform)."
As the report notes, the DSA states decisions to suspend or terminate accounts must be “proportionate and with due regard to fundamental rights,” while the P2B “requires a platform to notify a business user when terms and conditions are changed and before an account is closed.”
Apple advised Epic that it had terminated Epic’s account because of Sweeney’s “wholly insufficient and not credible” response to Apple’s request for written reassurance that it was acting in good faith and would honor its agreement with Apple. Sweeney sent a two-line email that stated “Epic and its subsidiaries are acting in good faith and will comply with all terms of current and future agreements with Apple, and we’ll be glad to provide Apple with any specific further assurances on the topic that you’d like.”
In a statement to iMore Wednesday, Apple said “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, affiliates, and/or other entities under Epic Games’ control at any time and at Apple’s sole discretion.’ In light of Epic’s past and ongoing behavior, Apple chose to exercise that right.”
As litigation expert and outspoken App Store critic Florian Mueller notes, the DMA leaves it up to Apple to define the criteria as to who can create an alternative app store, but notes “Epic’s case is a unique one, given the troubled history between the two companies.” Mueller says “The original grant of the developer account appeared to be a sign of a potential improvement of their relationship, but that may have been the result of an oversight as opposed to a conscious decision by Apple’s executives and lawyers to give Epic a chance to prove to be a reliable app store operator in the EU.” Apple has confirmed to iMore that Epic Games Sweden entered the DLPA without any executive review on Apple’s part, confirming Mueller’s suspicion.
According to Mueller, Epic is in a tricky situation given “that it lost the antitrust part of the U.S. litigation and, as a result, also the contract part (an Apple counterclaim).” As he notes, “If Epic now goes to the EU Commission and the EC asks Apple about this, Apple will say that it has obtained a judgment according to which it’s allowed to terminate any Epic developer agreement anytime for any reason or no reason, a judgment that was affirmed by the United States Court of Appeals for the Ninth Circuit and over which Epic brought a petition for writ of certiorari (request for Supreme Court review) that was denied.”
Mueller says the EU dispute is complicated (if you haven’t already guessed). He says that while a Swedish court (where Epic Sweden is based) would give “very little weight to the U.S. litigation and look at this mostly through a DMA lens,” the European Commission “is more likely to be dissuaded by the history of the U.S. litigation from taking action than the courts in the EU would be.” Epic’s recourse at this stage seems limited unless the EC decides to intervene based on the findings of the aforementioned inquiries. However, at this stage, Mueller (an advocate for the DMA) concedes “With Microsoft and Meta having stated publicly that Apple’s EU app rules don’t work for them, and with Epic now having seen its EU developer account terminated, it looks like alternative app stores in the EU will in the foreseeable future just come down to “adult content” and other niches. That is not the outcome the EU institutions had in mind.”
