Apple escalates Epic Games feud by blocking Fortnite app in EU

FILE PHOTO: Fortnite game installing on Android operating system is seen in this illustration taken, May 2, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

(Reuters) -Apple escalated its feud with Epic Games on Wednesday, blocking the Fortnite video-game maker from launching its own online marketplace on iPhones and iPads in Europe.

The two companies have been in a legal battle since 2020, when the gaming firm alleged that Apple's practice of charging up to 30% commissions on in-app payments on iPhones and other devices violated U.S. antitrust rules.

To distribute software on Apple iPhones, developers must sign up for an account with Apple and agree to its terms. Apple terminated some of Epic's developer accounts in 2020, when Epic pushed an update to its Fortnite app that violated Apple's in-app payment rules.

But Epic had recently secured a developer account in Sweden as Apple prepares to change many of its rules to comply with the Digital Markets Act in the European Union, which requires Apple to allow third parties to host their own app stores on its devices for the first time.

Epic Games said it had intended to use the Sweden-based developer account to bring its online marketplace, Epic Games Store, and the Fortnite game to iOS devices in Europe.

The game developer said Apple terminated that account. Epic alleged that by terminating its account, Apple was removing one of the largest potential competitors to the Apple App Store.

"This is a serious violation of the DMA (Digital Markets Act) and shows Apple has no intention of allowing true competition on iOS devices," Epic Games said.

The European Commission, the executive body of the EU, did not immediately respond to a request for comment.

In a statement, Apple said that it believes court rulings have confirmed that it has "sole discretion" to terminate any Epic Games developer account after Epic Games breached its contractual obligations under Apple's developer agreements, which must be signed to secure a developer account.

"In light of Epic’s past and ongoing behavior, Apple chose to exercise that right" to terminate Epic Games' account, Apple said.

Apple in January proposed certain changes ahead of a March 7 deadline to comply with certain conditions of the DMA, a legislation meant to make it easier for European users to move between competing services.

The company said it would allow alternative app stores on iPhones and an opt-out from using the in-app payments system, but set a "core technology fee" of 50 euro cents per user account per year for developers who sign up for the new regime.

(Reporting by Stephen Nellis in San Francisco and Akash Sriram in Bengaluru; Editing by Sriraj Kalluvila and Marguerita Choy)

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