Epic Games has filed an antitrust complaint against Apple in the European Union, alleging that the company uses “a series of carefully designed anti-competitive restrictions” to eliminate competition in mobile app distribution and payment processing systems. Put simply, Epic takes issue with Apple’s insistence that all iOS applications be distributed through its App Store, and that they exclusively use Apple’s payment processing system—with Apple getting a 30 percent revenue cut. The EU complaint, filed with the European Commission’s Directorate-General for Competition, is the third such action taken by Epic against Apple, following similar complaints that are already underway in the US, Australia, and the UK.
“What’s at stake here is the very future of mobile platforms,” Epic Games founder and CEO Tim Sweeney said in a statement. “Consumers have the right to install apps from sources of their choosing and developers have the right to compete in a fair marketplace. We will not stand idly by and allow Apple to use its platform dominance to control what should be a level digital playing field.
“It’s bad for consumers, who are paying inflated prices due to the complete lack of competition among stores and in-app payment processing. And it’s bad for developers, whose very livelihoods often hinge on Apple’s complete discretion as to who to allow on the iOS platform, and on which terms.”
The dispute between Epic and Apple began in August 2020, when Epic added a new payment system to Fortnite’s iOS version that could be used instead of Apple’s—which, more to the point, bypassed Apple’s 30 percent fee. Epic’s payment system was in direct contravention of Apple’s policies, and the company retaliated almost immediately by removing Fortnite from the App Store. Epic replied in kind by rolling out a Nineteen Eighty-Fortnite promo, based on Apple’s famous 1984 Macintosh ad, and then a few minutes after that—remember, this all happened on the same day—filed a lawsuit against Apple over Fortnite’s removal.
Since then, Apple has launched a countersuit against Epic after characterizing the whole thing as a marketing stunt, while Epic won a small victory in the form of a preliminary injunction preventing Apple from blocking the Unreal Engine on the App Store. Epic launched legal proceedings against Apple Australia in November 2020, and filed a complaint with the UK’s Competition Appeal Tribunal in January 2021.
Sweeney has also been very vocal about the matter on social media:
Apple still claim its rules “apply equally to every developer”.Paraphrasing Orwell, some are more equal than others!0% – Google and Facebook ads0% – Netflix0% – Amazon video direct payment15% – Amazon video paid thru Apple30% – Fortnitehttps://t.co/Rx1mFV1cY2February 17, 2021
In a statement sent to Business Insider, Apple said that Epic’s “reckless behavior [has] made pawns of customers.”
“Epic has been one of the most successful developers on the App Store, growing into a multibillion dollar business that reaches millions of iOS customers around the world, including in the EU,” the rep said. “In ways a judge has described as deceptive and clandestine, Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines that apply equally to every developer and protect customers.”
Sweeney took issue with Apple’s position in a response on Twitter, saying that “Apple’s rules make pawns of all consumers and companies in the app economy.”
Apple even tried to made pawns of all participants in the Unreal Engine ecosystem, seeking to block development of this critical technology on iOS. But for the court’s restraining order, Apple’s collective punishment would have affected bystanders 3 levels removed from Epic.February 17, 2021
One thing that may weigh in Epic’s favor is that the European Commission is already investigating Apple Pay to determine whether it violates EU rules on competition. The European Commission said in a June 2020 statement that, following a preliminary investigation, it “has concerns that Apple’s terms, conditions, and other measures related to the integration of Apple Pay for the purchase of goods and services on merchant apps and websites on iOS/iPadOS devices may distort competition and reduce choice and innovation.”
The EU has also previously demonstrated a willingness to take action against companies that break its rules: In January it fined Valve, Bandai Namco, Capcom, Focus Home Interactive, Koch Media, and ZeniMax a combined €7.8 million ($9.4 million USD) for violating its anti-trust regulations.
“This is much bigger than Epic versus Apple—it goes to the heart of whether consumers and developers can do business together directly on mobile platforms or are forced to use monopoly channels against their wishes and interests,” Epic said. “Epic has asked the Commission to address Apple’s anti-competitive conduct by imposing timely and effective remedies. Epic is not seeking damages from Apple, as is the case in the US, Australia and the UK. It is simply seeking fair access and competition that will benefit consumers and developers.”
The EU has not yet commented on the case publicly, but the lawsuit between Epic and Apple in the US is scheduled to begin on May 3, following a pre-trial conference on April 21.
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