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Apple intensifies Epic Games dispute by barring Fortnite app in EU

Fortnite game installing on Android operating system is displayed in this image shot, May 2, 2021.

March 6 (mod1s) - Apple (AAPL.O), opens new tab intensified its spat with Epic Games on Wednesday, banning the Fortnite video-game producer from opening its own online store for iPhones and iPads in Europe. 

The two firms have been in a legal fight since 2020, when the gambling company asserted that Apple's practice of collecting up to 30% commissions on in-app payments on its iPhone Operating System (iOS) devices violated U.S. antitrust regulations.

The new assault from Epic comes as Apple battles with worries about weak demand for its iPhones in China, and its stock has lost 12% so far this year, trailing its large tech counterparts in the U.S. Its shares remained basically unchanged on Wednesday. 

Attempts by regulators and rivals like as Epic to pave the way for competing markets on Apple's devices are a huge threat to the Silicon Valley heavyweight's profitability and control of its own ecosystem.

European politicians are compelling Apple to accept such third-party markets with a regulation dubbed the Digital Markets Act (DMA) that takes effect this week. 

Separately, Brussels antitrust officials on Monday penalized Apple 1.84 billion euros ($2 billion) for obstructing competition from music streaming competitors via limits on its App Store, Apple's first ever punishment for breaking EU laws. 

Epic was seeking to take advantage of the DMA, but Apple banned such attempts on Wednesday, citing Epic's earlier breaches of contract in the long-running legal fight.

Apple deleted a fresh developer account that Epic had registered in Sweden. Epic had established the account in an attempt to bring Fornite and other games back on iPhones in Europe by operating its own game shop on Apple's devices. Apple must enable third-party shops on its devices, under the new European rule. 

The developer accounts are vital because software producers cannot deliver programs to iPhones and iPads without one. Apple had already deleted some of Epic's developer accounts in 2020, after Epic purposefully disregarded Apple's in-app payment restrictions, using its violation of the rules and consequent expulsion from the App Store as the heart of public relations and litigation campaign against Apple.

Apple said on Wednesday the court orders have made plain that it has "sole discretion" to cancel any Epic Games developer account in light of its "egregious" violations of the company's developer agreements. 

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

Epic stated that by deleting its account, Apple was eliminating one of the major prospective rivals to the Apple App Store. 

"This is a serious violation of the DMA and shows Apple has no intention of allowing true competition on iOS devices," Epic Games remarked. 

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

Apple in January requested various adjustments ahead of a March 7 deadline to meet with certain terms of the DMA, a regulation aimed to make it simpler for European customers to migrate between rival services. 

The firm said it will offer alternative app stores for iPhones and an opt-out from utilizing 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.


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