Epic Games announced Wednesday that it has filed an antitrust complaint against Apple with the European Commission, which is the executive arm of the European Union.
In a complaint filed with the commission’s directorate-general for competition, the Fortnite developer said that the 30% cut that Apple takes on App Store purchases is anti-competitive.
Epic said that Apple has “not just harmed but completely eliminated competition in app distribution and payment processes,” adding that it “uses its control of the iOS ecosystem to benefit itself while blocking competitors.”
The European Commission told CNBC it had received the complaint and that it will assess it based on its standard procedures.
Epic launched its own in-app payment system last summer to try to avoid paying the 30% commission that Apple takes from in-app revenues. In response, Apple pulled Fortnite from its App Store and revoked Epic’s developer license.
“Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines that apply equally to every developer and protect customers,” Apple said in a statement shared with CNBC. “Their reckless behavior made pawns of customers, and we look forward to making this clear to the European Commission.”
Apple also claimed that its App Store has helped developers turn their ideas into apps, adding that Epic has been one of the most successful developers on the App Store and that it’s grown into a multibillion dollar business that reaches millions of iOS customers.
Epic has also filed complaints with competition regulators in the U.S. and Australia, and taken Apple to the U.K.’s Competition Tribunal.
The two companies are set to fight it out in a U.S. court in May and Apple CEO Tim Cook has been ordered to attend a seven-hour deposition.
“What’s at stake here is the very future of mobile platforms,” Epic Games founder and CEO Tim Sweeney said in a statement. “Consumers have the right to install apps from sources of their choosing and developers have the right to compete in a fair marketplace. We will not stand idly by and allow Apple to use its platform dominance to control what should be a level digital playing field.”
Sweeney added: “It’s bad for consumers, who are paying inflated prices due to the complete lack of competition among stores and in-app payment processing. And it’s bad for developers, whose very livelihoods often hinge on Apple’s complete discretion as to who to allow on the iOS platform, and on which terms.”
Epic isn’t the only firm that has complained about Apple’s App Store. Music streaming giant Spotify filed a complaint alleging that Apple unfairly squeezes its revenues, while Rakuten’s Kobo subsidiary and messaging app Telegram have also complained about the cut that Apple takes on its ebook sales.
The European Commission started an investigation last year into whether Apple is breaching competition law by making app developers use its in-app payment system.
Apple had a victory in the U.S. on Tuesday as North Dakota voted down a bill that would regulate app stores.
The North Dakota state senate voted 36-11 not to pass a bill that would have required app stores to enable software developers to use their own payment processing software and avoid fees charged by Apple and Google.
Stock futures jump after Senate passes $1.9 trillion Covid relief bill, Dow futures up 200 points
Traders work on the floor of the New York Stock Exchange.
U.S. stock futures jumped on Sunday evening as a new stimulus package from Washington headed toward final passage this week.
Futures contracts tied to the Dow Jones Industrial Average jumped 219 points, or 0.7%. Those for the S&P 500 and the Nasdaq 100 composite gained 0.5% and 0.6%, respectively.
The move in futures came after the Senate passed a $1.9 trillion economic relief and stimulus bill on Saturday, paving the way for extensions to unemployment benefits, another round of stimulus checks and aid to state and local governments. The Democrat-controlled House is expected to pass the bill later this week. President Joe Biden is expected to sign it into law before unemployment aid programs expire on March 14.
The fresh round of government spending could cause ripples in the U.S. Treasury market, where the benchmark 10-year yield has risen sharply in recent weeks. The yield rose as high as 1.62% on Friday after starting the calendar year below the 1% mark.
The rapid move in the bond marked has unnerved equity investors as well, contributing to weakness in stocks with high valuations.
Futures contracts tied to the 10-year fell 0.2% on Sunday night at the open of trading, implying higher yields.
“10-year yields finally caught up to other asset markets. This is putting pressure on valuations, especially for the most expensive stocks that had reached nosebleed valuations,” Mike Wilson, the chief U.S. equity strategist at Morgan Stanley, said in a note.
The stock market is coming off an afternoon rally on Friday that took some of the sting out of a rough week for high-flying momentum names. The tech-heavy Nasdaq finished with a week-to-date loss of 2.1%, while the S&P 500 gained 0.8%. The Dow, more reliant on cyclical stocks, rose 1.8%.
The Friday turnaround doesn’t signal that the recent weakness for the market is over, but the divergence between tech and cyclical plays shows that the bullish story remains intact, Morgan Stanley’s Wilson said.
“The bull market continues to be under the hood, with value and cyclicals leading the way. Growth stocks can rejoin the party once the valuation correction and repositioning is finished,” Wilson said.
On the economic front, investors will get a look at wholesale inventory data from January on Monday. Several economic measures in recent weeks have shown a recovery that is picking up steam, including a better-than-expected February jobs report released on Friday.
U.S. will defend troops after rocket attack in Iraq, Lloyd Austin says
U.S. Defense Secretary Lloyd Austin speaks to Defense Department personnel during a visit by U.S. President Joe Biden at the Pentagon in Arlington, Virginia, February 10, 2021.
Carlos Barria | Reuters
WASHINGTON – Secretary of Defense Lloyd Austin warned those responsible for carrying out last week’s rocket attack against an Iraqi base that hosts American troops will be held to account.
“The message to those that would carry out such an attack is that expect us to do what is necessary to defend ourselves,” Austin said in an interview with ABC that aired on Sunday.
“We’ll strike if that’s what we think we need to do at a time and place of our own choosing. We demand the right to protect our troops,” he said, adding that the U.S. is still assessing intelligence with its Iraqi partners.
Defense officials have previously said the attack had typical hallmarks of a strike by Iran-backed groups. Iran has denied involvement.
When asked if Iran would view a potential U.S. response as an escalation of tensions, the new Pentagon chief and retired Army four-star reiterated that Washington would do whatever is necessary to protect Americans and U.S. interests in the region.
“What they [Iranians] should draw from this, again, is that we’re going to defend our troops and our response will be thoughtful. It will be appropriate,” Austin said. “We would hope that they would choose to do the right things,” he added.
On Sunday, the U.S. military’s Central Command, which oversees the wars in the Middle East, flew its fourth bomber deployment to the region.
The show of force mission included two B-52H Stratofortress bombers alongside aircraft from Israel, Saudi Arabia, and Qatar at different points to “deter aggression and reassure partners and allies of the U.S. military’s commitment to security in the region.”
Last month, Iran rejected an invitation from global powers who signed the 2015 nuclear deal to discuss the regime’s potential return to the negotiating table, a significant setback in the Biden administration’s efforts to revive the Joint Comprehensive Plan of Action, or JCPOA.
The White House said that the Biden administration was disappointed with Iran’s decision to skip the informal meeting but would “reengage in meaningful diplomacy to achieve a mutual return to compliance with JCPOA commitments.”
President of Iran, Hassan Rouhani speaks during the National Combat Board Meeting with Coronavirus (Covid-19) in Tehran, Iran on Nov. 21, 2020.
Iranian Presidency Handout | Anadolu Agency | Getty Images
The Biden administration has previously said that it wants to revive the nuclear deal but won’t suspend sanctions until Tehran comes back into compliance. Tehran has refused to negotiate while U.S. sanctions remain in place.
The 2015 JCPOA, brokered by the Obama administration, lifted sanctions on Iran that had crippled its economy and cut its oil exports roughly in half. In exchange for billions of dollars in sanctions relief, Iran agreed to dismantle some of its nuclear program and open its facilities to more extensive international inspections.
The U.S. and its European allies believe Iran has ambitions to develop a nuclear bomb. Tehran has denied that allegation.
In 2018, then-President Donald Trump kept a campaign promise and withdrew the United States from the JCPOA calling it the “worst deal ever.” Following Washington’s exit from the landmark nuclear deal, other signatories of the pact have tried to keep the agreement alive.
Washington’s tense relationship with Tehran took several turns for the worse under the Trump administration.
President Donald Trump speaks during a briefing on Hurricane Michael in the Oval Office of the White House in Washington, DC, October 10, 2018.
Saul Loeb | AFP | Getty Images
People gather to protest the US air strike in Iraq that killed Iranian commander Qasem Soleimani, who headed Iran’s Revolutionary Guards’ elite Quds force in Sanaa, Yemen on January 6, 2020.
Mohammed Hamoud | Andalou Agency | Getty Images
Soleimani’s death led the regime to further scale back compliance with the international nuclear pact. In January 2020, Iran said it would no longer limit its uranium enrichment capacity or nuclear research.
In October, the United States unilaterally re-imposed U.N. sanctions on Tehran through a snapback process, which other U.N. Security Council members have previously said Washington does not have the authority to execute because it withdrew from the nuclear deal in 2018.
A month later, a top Iranian nuclear scientist was assassinated near Tehran, which led Iran’s government to allege that Israel was behind the attack with U.S. backing.
A view shows the scene of the attack that killed Prominent Iranian scientist Mohsen Fakhrizadeh, outside Tehran, Iran, November 27, 2020.
WANA via Reuters
During the summer of 2019, a string of attacks in the Persian Gulf set the U.S. and Iran on a path toward greater confrontation.
In June 2019, U.S. officials said an Iranian surface-to-air missile shot down an American military surveillance drone over the Strait of Hormuz. Iran said the aircraft was over its territory. That strike came a week after the U.S. blamed Iran for attacks on two oil tankers in the Persian Gulf region and after four tankers were attacked in May.
The U.S. that June slapped new sanctions on Iranian military leaders blamed for shooting down the drone. The measures also aimed to block financial resources for Iran’s Supreme Leader Ayatollah Khamenei.
Tensions soared again in September of 2019 when the U.S. blamed Iran for strikes in Saudi Arabia on the world’s largest crude processing plant and oil field. The strikes forced the kingdom to shut down half of its production operations.
The event triggered the largest spike in crude prices in decades and renewed concerns of a budding conflict in the Middle East.
The Pentagon described the strikes on the Saudi Arabian oil facilities as “sophisticated” and represented a “dramatic escalation” in tensions within the region.
All the while, Iran maintains that it was not behind the attacks.
Chinese foreign minister calls for ‘non-interference’ between China, U.S.
The flags of China, U.S. and the Chinese Communist Party are displayed in a flag stall at the Yiwu Wholesale Market in Yiwu, Zhejiang province, China, May 10, 2019.
Aly Song | Reuters
BEIJING — Chinese Foreign Minister Wang Yi said Sunday that the U.S. needs to remove “unreasonable restrictions” for the two countries’ relationship to move forward under President Joe Biden‘s administration.
Wang’s remarks come as tensions between the U.S. and China have escalated in the last few years under former President Donald Trump, whose term ended in January. So far, the Biden administration has maintained a tough position on China — calling the country a more assertive “competitor” — and raised concerns about Beijing’s stance around Taiwan, Hong Kong, Xinjiang and Tibet.
China’s central government considers those issues part of its domestic matters.
“Speaking of China-U.S. relations, I believe first of all both sides need to abide by the principle of non-interference in each others’ internal affairs,” Wang said. That’s according to an official English translation of his Mandarin-language remarks at a press conference held alongside the “Two Sessions” annual parliamentary meeting in Beijing, the country’s biggest political event of the year.
Biden had raised “fundamental concerns” about Beijing’s actions on issues such as Hong Kong in a two-hour phone call with Chinese President Xi Jinping in February ahead of the Lunar New Year holiday, according to the White House. At the time, the two leaders also discussed how to counter the coronavirus pandemic, working together on climate change and preventing weapons proliferation.
Wang said Sunday the two countries could also cooperate on the economic recovery from the pandemic, and pointed to the phone call as a positive basis for rebuilding the bilateral relationship.
“We’re ready to work with the United States to follow through on the outcome of this important phone call and set China-U.S. relations on a new path of healthy and steady growth,” he said.
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