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Apple Blocks Epic’s App Store Updates After Fortnite Fee Clash

Mark Gurman

(Bloomberg) -- Apple Inc. terminated Epic Games’s App Store developer account, escalating a bitter legal fight over the iPhone maker’s controversial fees and rules.

This means Epic can’t submit new apps or updates to the App Store and it prevents iPhone users from making purchases inside Epic’s popular Fortnite video game via Apple’s payment system. It will also leave the Apple version of Fortnite stalled in its current state.

The clash has highlighted simmering discontent among some developers who complain that Apple’s App Store rules are unfair and that the company’s fees are too high. The backlash has also increased antitrust scrutiny of Apple, the world’s most valuable company.

The Cupertino, California-based technology giant had recently threatened to pull Epic’s developer account after the game maker added an option for Fortnite players to pay Epic directly for in-game upgrades. That avoided a 30% cut that Apple takes through its App Store and broke Apple’s rules.

“We are disappointed that we have had to terminate the Epic Games account on the App Store,” Apple said in a statement. “We have worked with the team at Epic Games for many years on their launches and releases. The court recommended that Epic comply with the App Store guidelines while their case moves forward, guidelines they’ve followed for the past decade until they created this situation. Epic has refused.”

Epic sued Apple earlier this month after Apple pulled Fortnite from the App Store.

Read more: Fortnite’s Tim Sweeney Comes Out Swinging at Apple, Google

A court order last week denied Epic’s motion to force Apple to reinstate Fortnite on the App Store. However, the judge ruled that Apple could not terminate the developer account that Epic uses for Unreal Engine, a graphics technology that is used by many game developers. Apple said on Friday is it complying with the order and not ending that secondary account.

“Apple is asking that Epic revert Fortnite to exclusively use Apple payments,” Epic said in a statement. “Their proposal is an invitation for Epic to collude with Apple to maintain their monopoly over in-app payments on iOS, suppressing free market competition and inflating prices. As a matter of principle, we won’t participate in this scheme.”

Most developers would never publicly criticize Apple because the company’s App Store is such a vital source of users and revenue. Epic is in a different situation because Fortnite is widely used beyond Apple’s platform. Still, losing access to the App Store will likely hurt Epic financially. Since January 2012, Epic mobile games have been downloaded more than 159 million times through the App Store, generating about $1.2 billion in consumer spending, with roughly $360 million of this going to Apple, according to estimates from Sensor Tower.

Apple said Epic has repeatedly submitted Fortnite updates that are “designed to violate the guidelines of the App Store.” Apple added that this is “not fair to all other developers on the App Store and is putting customers in the middle of their fight. We hope that we can work together again in the future, but unfortunately that is not possible today.”

Read more about the court case here: Apple Defeats Epic’s Effort to Restore Fortnite on App Store

Apple added that terminating Epic’s developer account is normal practice for such violations. It also said that Epic Games has asked customers to direct frustration over the situation to AppleCare support, creating issues for other Apple customers by clogging up phone lines.

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