European Union Investigates Apple’s Closure of Epic Games’ Developer Account
The European Union (EU) has launched an investigation into Apple’s decision to close Epic Games’ developer account. The move comes after Epic Games accused Apple of breaching the bloc’s Digital Markets Act (DMA) by terminating its developer account. The EU is now evaluating whether Apple’s actions also raise compliance concerns with regard to two other regulations, the Digital Services Act (DSA) and the Platform-to-Business Regulation (P2B).
The DMA, which applies to Apple as a designated “gatekeeper” and its App Store as a “core platform service,” requires the company to allow third-party app stores. Failure to comply with the DMA could result in significant penalties, up to 10% of global annual turnover. Similarly, the DSA imposes penalties of up to 6% of global annual turnover for breaches.
The P2B regulation focuses on platform transparency and curbing unfair practices. It has been in force since 2020 and prohibits sudden and unexpected account suspensions without clear reasons. However, enforcement of the P2B regulation falls under the responsibility of Member State level authorities.
Epic Games claims that Apple terminated its developer account in retaliation for criticizing Apple’s DMA proposal. The proposal requires developers to sign up for new terms and conditions that include a new “core technology.” Apple, on the other hand, argues that Epic Games breached its contractual obligations, justifying the termination of its account.
Apple cites a US court ruling from September 2021, which found that the company does not hold a monopoly in digital mobile gaming transactions. The ruling did order Apple not to prohibit developers from adding links to alternative payment systems outside the App Store. However, under the EU’s DMA, Apple is required to permit third-party app stores and software downloads.
While the US court ruling may not have standing in the EU, Apple may be attempting to leverage different legal jurisdictions against each other. The EU has already passed laws regulating how Apple can operate its App Store due to concerns about its market power.
Apple has not provided further explanations to the EU regarding its actions under the DMA or its compliance with other measures applied to the App Store by the DSA and P2B. The company argues that the termination of Epic Games’ account is not limited to the EU and is globally applicable.
The ongoing legal battle between Apple and Epic Games extends beyond the EU, with litigation taking place in the US and Australia as well.
In conclusion, the EU’s investigation into Apple’s closure of Epic Games’ developer account highlights the regulatory scrutiny faced by tech giants. The outcome of this investigation could have significant implications for Apple’s operations in Europe and potentially impact the broader app store ecosystem.