Epic Games dropped a bombshell announcement this week, declaring its intent to finally resurrect its monumentally popular Fortnite game on iPhones and iPads. However, the iOS homecoming only applies to European device owners for now because Apple will soon have to comply with the region’s new Digital Markets Act (DMA) by ending some of its anticompetitive practices.

Fortnite’s exile traces back to 2020 when the parent company of the game, Epic Games, implemented direct in-app payments. This move blatantly violated Apple’s rigid App Store policies, likely made to challenge the anticompetitive policies in court. Apple has long prevented app downloads and in-app payments from anywhere outside of its App Store so that it can charge a hefty fee on every purchase (usually 27-30%).

The EU’s landmark legislation is now forcing Apple to cut some of its most anticompetitive practices surrounding apps on iOS. It will have to allow alternative app stores as well as sideloaded apps, downloaded from outside sources (often a browser). This could be a monumental change for iOS users, finally giving them access to the millions of apps previously unavailable to them.

EU’s DMA Marks Major Positive Shift for Users and Developers

The European Union’s Digital Markets Act (DMA), which takes effect on March 7th, is a rare set of regulations that might actually make the lives of internet users and developers better. Its aim is to force large tech companies deemed ‘gatekeepers’ to adopt fairer practices. The legislation classifies Apple (AAPL) and Google as 2 of these “digital gatekeepers” wielding excessive control over app access on devices that run their global duopoly of operating systems – iOS and Android.

The DMA aims to foster greater consumer choice by pushing Apple to allow iPhone owners to install apps via third-party app stores and sideloading instead of being restricted to Apple’s monopolistic App Store.

In the wake of DMA’s adoption, Apple announced upcoming changes for EU iOS users that aim to comply with these mandates. Most notably, developers can now distribute iPhone apps through their own or alternative marketplaces, process in-app payments independently, and communicate directly with users regarding their purchase options.

Fortnite is Riding the DMA Bandwagon for Good

Fortnite creator Epic Games is already planning to take advantage of the opportunity that these concessions provide to re-release the mobile version of the game through its own Epic Games Store.

Epic Games CEO, Tim Sweeney, took to social media proclaiming the firm’s plans to launch the Epic Games Store on iOS and return Fortnite to European iPhones later in 2024. However, Sweeney didn’t mince words in his harsh criticism of Apple’s announcement and was particularly critical of its plan to charge high fees on sideloaded apps.

“Apple’s plan to thwart Europe’s new Digital Markets Act law is a devious instance of malicious compliance“, Sweeney argued. “They are forcing developers to choose between App Store exclusivity or accept an also-illegal scheme rife with junk fees on downloads and taxes on payments they don’t process”.

Sweeney highlighted that despite the superficial notion that the company is cooperating with authorities, Apple intentionally maintains monopolistic control by restricting developer choices, imposing arbitrary constraints, and piling on fees.

The CEO went as far as to qualify the proposals made by Apple as “hot garbage,” claiming that they are still illegal under the DMA.

These Are Apple’s Proposed Changes to its Fee Schedule

Apple is proposing to reduce the commission charged to developers to 17% for applications that charge a subscription fee and 10% for the rest of the developers during their first year within the app.

In addition, those who opt to use Apple Pay to process in-app purchases will be subject to a 3% payment processing fee. For third-party apps, a €0.50 fee will be charged for each app download upon reaching the first 1 million installations. If the EU allows this fee, popular sideloaded apps (especially free apps) may be extremely unprofitable.

Apple leadership has defended its cautious concessions regarding the App Store many times. It advocates that centralizing app downloads is a necessary measure to protect users from malware and scams, both of which are allegedly present in third-party app stores. The company emphasized that apps within its marketplaces go through a strict vetting process that aims to catch unsafe code and illegal content.

Critics have long disagreed, arguing that the real reason for this policy is to enforce its exorbitant 27-30% fees.

Also read: Paper Trail Helped Epic Games Beat Google on Court, CEO Says

Apple will still force apps to undergo notarization security checks before the sideloaded apps can be executed on their devices. This process will allow the company to keep track of the software that is being installed on their phones so they can charge the new installation fees.

Epic Games historically objected vocally against Apple extracting any revenue from Fortnite transactions that don’t utilize App Store infrastructure. Sweeney believes that the new scheme can still be considered anti-competitive as Apple provides no distribution or technical functionality for apps reaching iOS through independent channels, not to mention its painful €0.50 per download fee.

Epic Games now finds itself begrudgingly paying directly for iOS access rights that Apple deliberately revoked years earlier from one of the world’s most popular games.

Nonetheless, Sweeney recognizes that bringing Fortnite Mobile back to European iOS users remains invaluable for recapturing revenue and relevance lost during the past three years of unavailability.

Epic Games still maintains its steadfast principles and remains locked in fierce legal standoffs with Apple and Alphabet (GOOG) globally over fair competition concerns. However, compromising to pay the new EU distribution fees, however dubious, represents a tolerable price for coming back to what can be considered the main plateau for mobile apps.

This saga leaves Apple precariously balancing its appeasement strategy. Bending slightly to let Fortnite rejoin iOS via the new DMA-related exemptions could be a canary-in-the-coal mine moment that will motivate other high-profile apps previously barred from the App Store to come back.

While Apple likely hopes that most developers still opt to rely on its distribution platform, its ironclad dominion is suffering from the first cracks since its inception and competitors are likely getting ready to exploit them.

Meanwhile, if Apple’s olive branches toward including Fortnite prove to be commercially successful for Epic Games, the company could aggressively pursue similar access for Android users through its own storefront.

That would complete Epic’s mission to diminish the existing mobile duopoly, at least to some extent.