Epic Games says Apple retaliated over lawsuits by banning company’s developer account
“Fortnite” creator Epic Games’ Chief Executive Tim Sweeney leaves after a weeks-long antitrust trial at federal court in Oakland, California, U.S. May 21, 2021. REUTERS/Brittany Hosea-Small
Brittany Hosea-small | Reuters
Apple has rejected Epic Games’ application for a developer account it would use to launch an app store for iPhones in Europe, Epic CEO Tim Sweeney said Wednesday.
Sweeney said Apple’s decision was in retaliation over the gaming company’s antitrust lobbying, its lawsuit against Apple, and some of Sweeney’s social media posts, citing emails from Apple App Store chief Phil Schiller and Apple lawyers.
“The manner in which Apple is going about killing Epic here as a competitor to the App Store is super egregious,” Sweeney said on a call with reporters. “This is the medieval feudal lord, mounting the skulls of their former enemies on their castle walls.”
It’s the first public example of Apple denying competing app stores in Europe, a move that could raise scrutiny of the iPhone maker’s plans to comply with a new antitrust law.
The relationship between Apple and Epic Games has been confrontational since Epic sued Apple in 2020 over whether Fortnite could evade Apple’s App Store rules and bypass its 30% cut of game sales. Epic mostly lost but forced some changes to Apple’s policies under California law.
The spat highlights global regulatory threats to Apple’s App Store sales, a profitable division for Apple reported under its services business.
An Apple spokesperson said that Apple had the right to terminate the account, especially because Epic continues to litigate against the company.
“Epic’s egregious breach of its contractual obligations to Apple led courts to determine that Apple has the right to terminate ‘any or all of Epic Games’ wholly owned subsidiaries, affiliates, and/or other entities under Epic Games’ control at any time and at Apple’s sole discretion.’ In light of Epic’s past and ongoing behavior, Apple chose to exercise that right,” the spokesperson said in a statement.
Apple has started to comply with the Digital Markets Act, a new law in Europe going into effect this week that forces big tech companies to open their platforms to competitors. For Apple, it means it will have to allow companies to offer third-party app stores in Europe to compete with the iPhone App Store. Apple opposed the law, citing user security.
Apple’s plan to introduce new fees, software warnings, and a rudimentary approval process for third-party app stores has drawn criticism from companies like Spotify, which say Apple isn’t complying with the spirit of the new EU law, including by adding a 50-euro-cent (55 cent) fee to downloads.
Sweeney said Wednesday that Epic planned to introduce a new app store in Europe to distribute Fortnite and other games. It applied for a developer account in Sweden but was denied by Apple after Schiller emailed Sweeney, citing his statements around the 2020 lawsuit and Epic Games’ decision to bypass App Store billing at the time.
“We invite you to provide us with written assurance that you are also acting in good faith, and that Epic Games Sweden, despite your public actions and rhetoric, honor all of its commitments,” Schiller wrote in the email provided by Epic Games.
Sweeney said he told Schiller that he would comply with all current and future agreements with Apple and that he was acting in good faith. Apple terminated the account a week later through an email from a lawyer, citing Sweeney’s “litany of public attacks on Apple” and social media posts. Apple also said it suspected Epic would use the account to lobby and “manipulate proceedings in other jurisdictions.”
“This is an open-ended invitation for Apple to tell us exactly what they want us to commit to, and how they want us to commit to it in order to not lock us as a competitor,” Sweeney said.
“Based on my interactions with Apple, they want two things,” he continued. “They want some sort of essay expressing fealty to Apple, a creative writing project, and they want us to shut up.”
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WATCH: Epic Games lawsuit
An Apple store in Walnut Creek, California, U.S., on April 30, 2025.
Paul Morris | Bloomberg | Getty Images
Apple is asking a court to pause a recent decision in its case against Epic Games and allow the iPhone maker to once again charge a commission on in-app transactions that link out for payment.
Last month, U.S. District Judge Yvonne Gonzalez Rogers in Oakland found that Apple had violated her original court order from the Epic trial, originally decided in 2021, that forced Apple to make limited changes to its linking out policy under California law.
Judge Rogers’ new ruling is more expansive, ordering Apple to immediately stop imposing its commissions on purchases made for iPhone apps through web links inside its apps, among other changes.
Apple is now looking to get a stay on that order, as well as another one from the case that prevents it from restricting app developers from choosing the language or placement of those links, until the entire decision can be appealed. Apple says that required changes in their current form will cost the company “substantial sums.”
“This is the latest chapter in Epic’s largely unsuccessful effort to use competition law to change how Apple runs the App Store,” Apple said in the emergency motion for a stay. The motion cites a previous order in the case that found that new linking policies would cost Apple “hundreds of millions to billions” of dollars annually.
If Apple succeeds, it will allow the company to roll back changes that have already started to shift the economics of app development. Developers including Amazon and Spotify have been able to update their apps to avoid Apple’s commissions and direct customers to their own website for payment.
Prior to the ruling, Amazon’s Kindle app told users they could not purchase a book in the iPhone app. After a recent update, the app now shows an orange “Get Book” button that links to Amazon’s website.
Epic also plans to introduce new software to allow app and game developers to easily link to their websites to take payments.
“This forces Apple to compete,” Epic Games CEO Tim Sweeney said shortly after last month’s decision. “This is what we wanted all along.”
Apple said in the filing that “non-party developers are already seizing upon the Order to reduce consumer choice (and damage Apple’s business) by, among other things, impeding the use of” in-app purchases.
Rogers made a criminal referral in the case, saying that Apple misled the court and that a company vice president “outright lied” about when and why Apple decided to charge 27% for external payments. The real decision, the judge said, took place in meetings involving Apple CEO Tim Cook.
Wednesday’s filing from Apple doesn’t address Rogers’ accusations that the company misled the judge, but it does argue that the ruling was punitive. Apple’s lawyers also claimed that civil contempt sanctions can only coerce compliance with an existing order, not punish non-compliance.
Apple said earlier this week in a court filing it would appeal the contempt ruling.
“We’ve complied with the court’s order and we’re going to appeal,” Cook told investors on the company’s quarterly earnings call last week.
WATCH: Apple says it strongly disagrees with Epic Games decision
Rene Haas, CEO of chip tech provider Arm Holdings, holds a replica of a chip with his company’s logo on it, during an event in which Malaysia’s Prime Minister Anwar Ibrahim officially announces a $250 million deal with the company, in Kuala Lumpur, Malaysia March 5, 2025.
Hasnoor Hussain | Reuters
Arm shares dropped more than 8% in extended trading on Wednesday after the chip-design company issued weaker-than-expected guidance for the current quarter.
Here’s how the company did in the fiscal fourth quarter compared with LSEG consensus:
- Earnings per share: 55 cents, adjusted vs. 52 cents expected
- Revenue: $1.24 billion vs. $1.23 billion
While Arm topped estimates for the quarter ended March 31, Wall Street is looking ahead to the company’s forecast for the first quarter.
Arm said revenue will be between $1 billion and $1.1 billion. The middle of the range is below the $1.1 billion average analysts estimated, according to LSEG. Earnings per share will be between 30 cents and 38 cents, while analysts were expecting 42 cents.
SoftBank controls about 90% of Arm, and took the company public in 2023. It now has a market cap of over $130 billion as of Wednesday’s close.
Arm designs the fundamental architecture upon which many chips are built, and sells licenses for its designs to companies such as Qualcomm and Nvidia, charging royalty fees on each sale they make. The company claims 99% of premium smartphones are powered by Arm technology.
Royalty revenue in the quarter rose 18% from a year earlier to $607 million.
Net income fell 6% to $210 million, or 20 cents a share, from $224 million, or 21 cents, in the year-ago quarter. Revenue jumped 34% from $928 million a year earlier.
Thomas Fuller | SOPA Images | Lightrocket | Getty Images
AppLovin shares soared as high as 15% in extended trading after the company reported earnings and revenue that beat expectations and announced the sale of its mobile gaming business.
Here’s how the company did compared to LSEG consensus estimates:
- Earnings: $1.67 per share vs $1.45 per share expected
- Revenue: $1.48 billion vs $1.38 billion expected
AppLovin also agreed on Wednesday to sell its mobile gaming business to Tripledot Studios in a deal worth $400 million in cash considerations. The advertising tech company will also obtain a roughly 20% ownership stake in Tripledot Studios, which makes mobile games like Sudoko Friends, Puzzletime and Solitaire Classic.”
The deal is expected to close in the second quarter of 2025.
AppLovin said second-quarter sales should come in the range of $1.2 billion to $1.22 billion, trailing analysts expectations of $1.38 billion.
The company reported first-quarter net income of $576 million, or $1.67 per share, up from $234 million, or 67 cents per share, in the same quarter of 2024.
AppLovin total costs and expenses for the first quarter came in at $820.55 million, representing a 14% increase from the previous year during the same quarter.
The ad-tech firm said in February that it had signed a term sheet to sell its apps business for “total estimated consideration” of $900 million, which included $500 million in cash.
AppLovin’s business has been split between advertising and apps, which is primarily made up of game studios that the company has acquired over the years. With the historic growth in its advertising unit, due to rapid advancements in artificial intelligence, the apps business had become much less important.
The company logged $1.16 billion in first-quarter advertising sales, up from the $678 million it recorded a year ago during the same period.
Sales of the company’s apps-related business for the quarter came in at $325 million, which was a 14% decline from the prior year.
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