Prominent game developer Epic Games has filed an antitrust complaint against Apple in the European Union, widening the net of its continuing legal challenges after filing lawsuits in the US, Australia, and the UK, the last of which you can read about in our blog post here.
At the core of the legal dispute is how much control over content and revenue-share technology giants should have in relation to their apps. Epic claims that Apple uses its iOS system to impose commercial burdens on potential rivals, specifically a 30 per cent “tax” on App Store purchases. Epic has alleged that Apple has “not just harmed but completely eliminated competition in app distribution and payment processes” by staging a string of “carefully designed anti-competitive restrictions”, which it argues are in breach of EU law.
The online game “Fortnite” was removed from both Apple’s App Store and Alphabet Inc.’s Google Play Store last year after Epic created a payment system that effectively cut off both companies from the 30% share of users’ spending that they would otherwise charge Epic. Apple announced in November 2020 that they would reduce this “tax” from 30% to 15% for developers making less than $1million through the App Store. Apple has also removed Epic’s developer’s licence for the iOS platform, allegedly in retaliation for Epic cutting Apple out. Epic has sued both Apple and Google for alleged monopolistic conduct in the US, and Apple has countersued.
In the European case, Epic’s legal complaint joins others against Apple, including one filed by music-streaming service Spotify, and the European Commission has started a formal investigation into Apple’s alleged anticompetitive behaviour. The claims also allege that the relevant contractual agreements for app developers are unlawful under Article 101 of the Treaty for the Functioning of the EU.
“What’s at stake here is the very future of mobile platforms,” said Epic Chief Executive Officer Tim Sweeney. “We will not stand idly by and allow Apple to use its platform dominance to control what should be a level digital playing field.”
Please contact Tim Cowen if you have any questions relating to the above.