LDN - Business

Apple retreats in Epic feud, allows Fortnite return in EU

[March 09, 2024] By Stephen Nellis and Akash Sriram

(Reuters) -Under pressure from European regulators, Apple took a step back in its feud with Epic Games on Friday, clearing the way for Epic to put its own game store on iPhones and iPads in Europe.

Earlier this week, Apple had taken steps to block Epic from starting up a store and bringing back the popular game Fortnite, which Apple removed from its App Store in 2020 after Epic broke the iPhone maker's in-app payment rules in protest.

Apple's decision to open its door to Epic follows the European Union's Thursday deadline for Big Tech companies to comply with the Digital Markets Act (DMA), a set of rules that bans Apple and Google from controlling which apps are distributed on devices with the iOS and Android operating systems.

Thierry Breton, the EU's industry chief, said regulators had warned Apple about the iPhone maker's move earlier this week to block Epic's potential return.

"I take note with satisfaction that following our contacts Apple decided to backtrack its decision on Epic exclusion. From Day 2, #DMA is already showing very concrete results!" Breton said on the X social media platform.

Epic and Apple 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 its iOS devices violated U.S. antitrust rules. Epic lost its court battle against Apple, and the game maker's gambit to intentionally break Apple's rules as a protest got it banned from Apple's devices.

Epic's victory on Friday leaves it well short of everything it wants from Apple.

Epic CEO Tim Sweeney has criticized Apple's plans for complying with the DMA, under which Apple says it still has the right to exclude third-party app marketplaces from its devices under some circumstances. And Fortnite remains unavailable in the App Store in the United States.

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People in silhouette walk by a Fortnite gaming digital monitor during an event in New York City, U.S., December 4, 2023. REUTERS/Shannon Stapleton/File Photo

For its part, Apple is grappling with an erosion of its App Store business model at the same time it has told investors that iPhone sales this quarter will be billions of dollars lower than what Wall Street expected.

The most recent tangle between Apple and Epic involved Apple's developer accounts, which are normally a minor but necessary administrative step for developers before selling apps on Apple devices.

Apple on Friday reinstated Epic Games' developer account two days after it had blocked the company from launching its own online marketplace on iPhones and iPads in Europe.

The game developer said it will move on with its plans to bring the Epic Games Store and Fortnite back to iOS in the continent.

"This sends a strong signal to developers that the European Commission will act swiftly to enforce the Digital Markets Act and hold gatekeepers accountable," Epic Games added.

Apple earlier this week said it had terminated Epic's account because the company's actions made it doubt whether it intended to follow the new rules Apple has set out to comply with the DMA.

"Following conversations with Epic, they have committed to follow the rules, including our DMA policies. As a result, Epic Sweden AB has been permitted to re-sign the developer agreement and accepted into the Apple Developer Program," Apple said in a statement.

(Reporting by Akash Sriram in Bengaluru and Stephen Nellis in San Francisco; Editing by Krishna Chandra Eluri, Marguerita Choy and Daniel Wallis)

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