Apple blocks Epic Games from launch new app store for iPhones in EU, escalates feud

Apple has barred Epic Games from acquiring a developer account intended for launching a new app store on iPhones in Europe. Epic Games CEO Tim Sweeney views this action as retaliation for Epic’s antitrust actions, lawsuit against Apple, and critiques of Apple’s App Store policies, as reported by CNBC.

The conflict stems from a disagreement since 2020 regarding Apple’s 30 per cent commission fees, resulting in a lawsuit from Epic and subsequent policy adjustments by Apple. Amid this dispute, Apple defended its rejection of Epic’s application for a developer account, citing Epic’s past contractual violations and ongoing legal disputes.

This clash occurs against the backdrop of the European Union’s Digital Markets Act (DMA), a new antitrust law aiming to promote competition by allowing third-party app stores. Sweeney criticized Apple’s refusal to grant Epic a developer account, interpreting it as a demand for loyalty and silence on public critique.

Apple’s denial of the application, the first known instance of such, could prompt scrutiny of its compliance with the DMA. This development follows Apple’s recent adjustments to its app distribution policies in response to feedback, aiming to align with the DMA's requirements.

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The dispute comes as EU competition chief Margrethe Vestager emphasizes the DMA’s focus on app stores, prioritizing fair access for smaller app stores to operating systems.

Epic’s challenge to Apple coincides with concerns about tepid demand for iPhones in China, as Apple faces a 12% stock decline this year. Regulatory and competitor efforts to establish rival marketplaces on Apple's devices pose a significant threat to its profits and control over its ecosystem.

European lawmakers are enforcing third-party marketplaces on Apple's devices through the DMA, while Brussels antitrust regulators recently fined Apple €1.84 billion for impeding competition from music streaming rivals via App Store restrictions, marking Apple's first penalty for breaching EU rules.

Apple blocked Epic's efforts to leverage the DMA on Wednesday, citing past breaches of contract in their ongoing legal dispute.

(With inputs from agencies)