What you should know
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- Apple initially blocked Epic Games Store’s launch on iPhone in the EU and closed Epic’s Developer Account, citing a past court ruling on Epic’s breach of contract.
- The Digital Markets Act (DMA) mandates Apple to allow sideloading and third-party in-app payment platforms in the EU, challenging Apple’s traditional 30% cut on in-app transactions.
- After negotiations, Apple agreed to reinstate Epic’s Developer Account in the EU, influenced by the potential for a hefty penalty under the DMA, which could have been up to 10% of its fiscal 2023 revenue.
- Epic Games plans to launch the Epic Games Store and bring Fortnite back to iOS in Europe, following Apple’s commitment to adhere to the DMA regulations.
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Full Story
Oh boy, earlier this week, Apple threw a wrench in Epic’s grand plan. They were all set to launch their Epic Games Store for the iPhone in the EU. That’s where the Digital Markets Act (DMA) comes into play, making such dreams possible.
But then, bam! On Wednesday, Apple went and closed Epic’s Developer Account in the EU. This move basically threw a big, fat stop sign in front of Epic, stopping them from offering their Games Store to iPhone users across the 27 EU countries.
Now, here’s the kicker. The DMA was supposed to force Apple’s hand, making them allow iPhone users in the EU to sideload apps from third-party app stores. Epic was counting on that.
But nope, Apple wasn’t having any of it. They blamed their drastic move on a thirst for revenge. At least, that’s what Epic thought. They believed Apple was retaliating because Tim Sweeney, Epic’s CEO, had the guts to criticize Apple over some hefty fees in the EU.
The drama doesn’t stop there. The DMA also had this rule where Apple’s supposed to let developers promote third-party in-app payment platforms. Why? So they could dodge the hefty 30% cut Apple takes when it uses its own in-app processing platform.
Apple’s response? They claimed they had every right to terminate Epic’s EU Developer Account. Why? Because of a past court ruling that highlighted Epic’s “egregious breach of its contractual obligations.” Last Wednesday, Apple was like, “Given Epic’s past and ongoing behavior, we’re exercising that right.”
But guess what? Over the last two days, Apple and Epic had a little sit-down. And Epic managed to convince Apple they wouldn’t break the rules like they did four years ago.
Flashback to 2020, Epic tried to pull a fast one. They tried selling their VBucks currency directly to Fortnite players, completely bypassing Apple’s App Store rules. This was a big no-no because it meant Epic could dodge Apple’s 30% cut of in-app purchases. They were essentially selling their game currency for cheaper than what was listed in the App Store.
And what did Apple do? They booted Epic out of the App Store in 2020 for this stunt, selling VBucks to iPhone users on the sly.
Fast forward to today, and Apple’s had a change of heart. In an update to a blog post published on Wednesday (hat tip to 9to5Mac), Epic Games was like, “Guess what? Apple’s back on board.” They’ve committed to the European Commission that they’ll reinstate our developer account. This is huge, sending a clear message to developers everywhere that the European Commission isn’t playing around. They’ll enforce the DMA and keep the gatekeepers in check.
We’re back on track to launch the Epic Games Store and bring Fortnite back to iOS in Europe. Onward and upward!
But let’s not forget, Apple’s change of tune could have been motivated by something else. Like, oh, I don’t know, a potential $38.3 billion penalty? That’s right, the EU can slap companies with a fine up to 10% of their global revenue for not following the DMA. And for repeat offenders? Make that up to 20%. If Apple hadn’t reversed its stance on Epic and got called out by the EU for not sticking to the DMA, they could have been looking at a fine up to $38.3 billion, 10% of its fiscal 2023 worldwide revenue.
Today, Apple was like, “Alright, alright. After talking it out with Epic, they’ve promised to play by the rules, including our DMA policies.” As a result, Epic Sweden AB is back in the game, re-signed the developer agreement, and got accepted into the Apple Developer Program.
So, if you’re a die-hard Fortnite fan, here’s a thought. Quit your job, sell your house, pack up your life, and move to the EU. You’ll need to buy a new iPhone sold in one of the 27 EU countries (you can trade in your current model). And who knows? Maybe you’ll land a job in the process.