More fines on the way? The EU is investigating Apple's decision to close Epic developer accounts.

The tension between Apple and the European Union is escalating?

After the US gaming company Epic Games attempted to bypass Apple's payment system and charge players directly, Apple decided to remove Epic Games from the App Store. This decision has led to Epic being unable to offer games on Apple devices in Europe or launch its own app store, sparking the attention of the European Commission towards Apple.

On Thursday, March 7th, the European Commission announced that the EU is evaluating whether Apple's actions violate the Digital Markets Act and other EU laws, and has requested further explanations from Apple. This investigation may intensify the tension between Apple and the EU, especially after the EU fined Apple 18 billion euros on Monday for its App Store policies being detrimental to consumers.

With the EU regulatory authorities focusing on Apple's App Store commission fees, Apple may face more fines. According to Sensor Tower's estimate, Apple earned around $27 billion in commission fees alone in 2023. If found to be in violation of the Digital Markets Act, the EU can impose fines on the company of up to 10% of its annual turnover, which can be increased to 20% for repeated violations, potentially leading to the company being forcibly split up.

The Digital Markets Act requires all tech companies affected by it, including Apple, to ensure their operations comply with the new legal requirements by March 7th. In order to comply with the Digital Markets Act, Apple has started adjusting its iOS operating system to allow users to download applications from third-party app stores and use other payment systems.

However, these changes are still subject to criticism in the market. Critics, including Epic, believe that despite Apple reducing its commission by 30%, introducing two additional fixed fees based on the number of app installations will still hinder competition, and EU regulatory authorities should take further action.

Furthermore, the conflict between Apple and Epic stems from Epic's attempt to circumvent Apple's 30% commission. Epic believes this fee is too high and has tried to bypass it by charging users directly, leading to a legal dispute between the two parties. Apple insists that its actions are legal and accuses Epic of seriously breaching contractual obligations. Epic Games lost the legal battle against Apple's App Store fee policy protest, further intensifying the tension between the two parties.

On Wednesday, Epic disclosed an email dated February 23rd. The email showed that Apple executive Phil Schiller requested Epic to provide written assurance to prove its integrity towards Apple. At the same time, Apple terminated Epic's account on Apple, partly due to Epic CEO Tim Sweeney's sharp criticism of Apple's compliance with the Digital Markets Act plan. Sweeney stated on Wednesday that Apple's actions are a demonstration of power and a deterrent.