Epic Games CEO blasts Apple for ‘malicious compliance’ with EU Digital Markets Act

Apple announced its plan today to comply with “gatekeeper” restrictions in the European Union’s Digital Markets Act today. But with the ink barely dry on that Epic Games CEO Tim Sweeney blasted Apple for “malicious compliance.”

Sweeney said in a tweet, “Apple’s plan to thwart Europe’s new Digital Markets Act law is a devious new instance of Malicious Compliance. They are forcing developers to choose between App Store exclusivity and the store terms, which will be illegal under DMA, or accept a new also-illegal anticompetitive scheme rife with new Junk Fees on downloads and new Apple taxes on payments they don’t process.”

Sweeney said that Apple proposes that it can choose which stores are allowed to compete with their App Store.

“They could block Epic from launching the Epic Games Store and distributing Fortnite through it, for example, or block Microsoft, Valve, Good Old Games, or new entrants,” Sweeney said. “The Epic Games Store is the No. 7 software store in the world (behind the 3 console stores, 2 mobile stores, and Steam on PC).”

Sweeney said Epic is determined to launch (or really relaunch) on iOS and Android and enter the competition to become the No. 1 multi-platform software store, on the foundation of payment competition, 0%-12% fees, and exclusive games like Fortnite.

“Epic has always supported the notion of Apple notarization and malware scanning for apps, but we strongly reject Apple’s twisting this process to undermine competition and continue imposing Apple taxes on transactions they’re not involved in,” Sweeney said. “There’s a lot more hot garbage in Apple’s announcement. It will take more time to parse both the written and unwritten parts of this new horror show, so stay tuned.”

Apple’s announcement

The EU’s Digital Markets Act goes into effect in March and it prohibits tech companies with “gatekeeper” status from forcing developers on their platforms into the gatekeepers’ own solutions for commerce. It applies to Apple’s App Store and the Google Play Store. In the past, Apple prohibited devs from advertising that they had lower prices in alternative app stores outside of the Apple App Store. In Epic’s antitrust case, a federal judge ruled this as monopolistic behavior and ordered Apple to stop it. The U.S. Supreme Court upheld that decision, but denied other remedies that Epic sought.

The EU act is the latest regulatory action that Apple faces. Today, Apple announced changes to iOS, Safari, and the App Store impacting developers’ apps in the European Union (EU) to comply with the Digital Markets Act (DMA).

Apple said the changes include more than 600 new APIs, expanded app analytics, functionality for alternative browser engines, and options for processing app payments and distributing iOS apps. Across every change, Apple is introducing new safeguards that reduce — but don’t eliminate — new risks the DMA poses to EU users, the company said.

The new options for processing payments and downloading apps on iOS open new avenues for malware, fraud and scams, illicit and harmful content, and other privacy and security threats, Apple said. That’s why Apple said it is introducing protections — including Notarization for iOS apps, an authorization for marketplace developers, and disclosures on alternative payments — to reduce risks and deliver the best, most secure experience possible for users in the EU.

Developers can learn about the changes on Apple’s dev support page and can test capabilities in iOS 17.4 beta today. The new capabilities will become available to users in the 27 EU countries beginning in March 2024.

Coalitiion for App Fairness

Meanwhile Epic got support from another group. Rick VanMeter, executive director of the Coalition for App Fairness (CAF), released a statement after Apple announced the details of their proposed compliance plan ahead of the Digital Markets Act (DMA) implementation deadline on March 7, 2024.

“Apple clearly has no intention to comply with the DMA. Apple is introducing new fees on direct downloads and payments they do nothing to process, which violates the law,” VanMeter said. “This plan does not achieve the DMA’s goal to increase competition and fairness in the digital market – it is not fair, reasonable, nor non-discriminatory.”

He said that Apple’s proposal forces developers to choose between two anticompetitive and illegal options.

“Either stick with the terrible status quo or opt into a new convoluted set of terms that are bad for developers and consumers alike,” he said. “This is yet another attempt to circumvent regulation, the likes of which we’ve seen in the United States, the Netherlands and South Korea. Apple’s ‘plan’ is a shameless insult to the European Commission and the millions of European consumers they represent – it must not stand and should be rejected by the Commission.”

The Digital Markets Act states [Article 5(4)] “The gatekeeper shall allow business users, free of charge, to communicate and promote offers, including under different conditions, to end users acquired via its core platform service or through other channels, and to conclude contracts with those end users, regardless of whether, for that purpose, they use the core platform services of the gatekeeper.”

And it also says, [Article 5(7)] “The gatekeeper shall not require end users to use, or business users to use, to offer, or to interoperate with, an identification service, a web browser engine or a payment service, or technical services that support the provision of payment services, such as payment systems for in-app purchases, of that gatekeeper in the context of services provided by the business users using that gatekeeper’s core platform services.”

Originally formed by Basecamp, Blix, Blockchain.com, Deezer, Epic Games, the European Publishers Council, Match Group, News Media Europe, Prepear, Proton, Skydemon, Spotify, and Tile, CAF has grown from 13 to over 70 members since launching in September 2020.