In Europe, Apple and gaming giant Epic have launched a new round of competition. This competition is pushing a new EU regulation to the forefront. The core dispute of the new regulation is whether technology giants have the power to unilaterally block potential opponents.
Opening up commitments under new EU regulations
An EU bill called the Digital Markets Act, or DMA, will officially enter into force on March 7, 2024. This bill is intended to force Apple, Google and other entities known as "gatekeepers" to open their closed ecosystems. The regulations require Apple to allow users to download software from third-party app stores and allow developers to use alternative payment systems. Many developers see this regulation as a key opportunity to break the monopoly control of Apple's App Store.
However, the process of moving regulations from written provisions to actual implementation is full of challenges. The European Commission has begun requesting more information from Apple, with the purpose of asking Apple to explain why it prevents Epic Games from launching its own game store in the European market. This behavior means that regulatory agencies are paying close attention to Apple's implementation methods and reviewing whether its actions are truly in line with the original intention of the new regulations to "promote fair competition."
The focus of controversy over account bans
As early as early 2024, Epic Games created a new developer account in Sweden. The purpose is to use this account to enable "Fortnite" to return to European iOS devices and operate its Epic Game Store. However, Apple quickly terminated the account. The reason given by Apple is that Epic has seriously violated the developer agreement before, so it reserves the right to terminate its related accounts based on the court's judgment.
Epic accused Apple of abusing its power in order to prevent a known competitor from entering the market through new regulations. Both parties have their own opinions, which makes this incident no longer just a commercial dispute, but has become the first major test of the effectiveness of DMA regulations, to test whether it can truly constrain the platform’s discretion.
The mutual game of legal basis
The legal basis cited by Apple comes from the court judgment obtained in the long-term litigation between it and Epic in the United States. The judgment confirmed that Apple has the right to terminate the entity account controlled by Epic. Based on this judgment, Apple believes that the actions it takes on a global scale are legally justified and are exercising contractual rights.
However, EU regulatory agencies may hold a different view. As a new regional law of the European Union, how to coordinate the legal effect of the DMA with the judgments of the courts of member states has become a complicated issue. The European Commission has launched an assessment to see whether Apple's actions also violate local EU regulations such as the Digital Services Act (DSA), which means that the legal conflict may further escalate.
strategic intent of business competition
For Epic Games, returning to the iOS platform and operating its own store has great strategic value. Its business model relies on the combination of "game store" and "in-game purchases" to avoid Apple's 30% commission. The European market is a key breakthrough for it to achieve this goal.
Apple obviously hopes to exclude "challengers" like Epic from its ecosystem in order to maintain the App Store's revenue model and its control over software distribution. The outcome of this game will directly affect whether other large developers will follow Epic in the future and try to build independent third-party stores.
Impact on developers and the market
If Apple successfully blocks Epic, it may send a warning signal to other developers that using DMA regulations to challenge Apple is not entirely without risks. Small and medium-sized developers may become increasingly hesitant, fearing that going against the platform will lead to retaliation, which will have an impact on the original appeal of the new regulations to encourage competition.
On the other hand, if the EU supports Epic's situation and forces Apple to restore Epic's account, the authority of the DMA will be greatly enhanced. In this way, more developers will be encouraged to explore alternative distribution and payment solutions, which will gradually change the current pattern of the iOS application market in terms of possibilities, thereby bringing more choices and lower prices to consumers.
The future direction of regulatory intervention
At this moment, the role played by the European Commission is of vital significance. It has transformed from "paying close attention" to "formally making inquiries." This change is usually a preparatory step for an in-depth investigation. At this moment, the Commission needs to determine whether Apple's specific behavior is a legitimate and reasonable exercise of its rights, or whether it is anti-competitive behavior that intentionally circumvents DMA obligations.
The final decision will not only involve two companies, but will also play a role in defining the actual implementation effectiveness of the DMA regulations. How regulators strike a balance between protecting contractual rights and promoting market openness will set a significant precedent for the regulation of global digital markets.
Regarding this battle focusing on app store control, do you think the EU's new regulations can successfully break through the walled gardens built by technology giants, or can Apple rely on existing legal contracts to guard its ecological boundaries? Welcome to share your insights in the comment area.
