Epic says it has proof Apple was scaring users off third-party app stores

Epic Games reports a substantial improvement in Epic Games Store installation success rates on iOS, with drop-off rates decreasing from 65% to approximately 25% following Apple's streamlining of third-party app marketplace installation processes in iOS 18.6. This change, a direct consequence of the EU's Digital Markets Act (DMA), demonstrates the regulation's tangible impact on platform gatekeepers. However, Epic continues to allege Apple's non-compliance and criticizes Google for similar obstructive practices on Android, highlighting persistent regulatory and competitive pressures on major platform operators regarding app distribution.

Analysis

Epic Games' latest data provides tangible evidence of the EU's Digital Markets Act (DMA) directly impacting Apple's (AAPL) platform control. The reported reduction in the Epic Games Store installation drop-off rate on iOS—from 65% to approximately 25%—is a direct consequence of Apple streamlining its installation process from 15 to 6 steps in iOS 18.6. This change, forced by EU regulatory pressure, validates concerns that Apple's previous user experience was a significant barrier to competition. However, Epic's continued allegations of anticompetitive behavior suggest that legal and regulatory headwinds for Apple will persist. The report simultaneously intensifies scrutiny on Google (GOOGL), with Epic explicitly citing a "deceptive user interface" on Android that results in a more than 50% failure rate for its store installations. This positions Google as a key target for similar DMA enforcement, amplifying the regulatory risk for both dominant mobile ecosystem gatekeepers and their high-margin app distribution models.

Key Decisions for Investors

• Investors in Apple and Google should recognize this as confirmation that regulatory intervention, specifically the DMA, can enforce material changes to their platforms, posing a persistent risk to the long-term profitability of their app store monopolies.
• While Apple has made concessions, the significant improvement in a competitor's user acquisition following these changes suggests that any further mandated easing of restrictions could accelerate the erosion of its App Store's competitive moat and service revenue dominance.
• The direct and quantified criticism of Google's practices may signal heightened near-term regulatory risk for Alphabet compared to Apple, warranting close monitoring of any forthcoming investigations or enforcement actions from the EU Commission.