A U.S. court order required Apple to allow more competition for app downloads and payment methods in its App Store. Apple violated this order. A federal judge in California ruled that Apple will be referred to federal prosecutors.
Judge Yvonne Gonzalez Rogers in Oakland issued an 80-page ruling. This ruling stated that Apple failed to comply with her prior injunction order. This order was imposed in an antitrust lawsuit brought by Epic Games, the maker of “Fortnite.”
Gonzalez Rogers said, “Apple’s continued attempts to interfere with competition will not be tolerated.” She added, “This is an injunction, not a negotiation. There are no do-overs once a party willfully disregards a court order.”
Gonzalez Rogers referred Apple and Alex Roman, vice president of finance, to federal prosecutors. She wants a criminal contempt investigation into their conduct in the case.
Roman gave testimony about Apple’s compliance steps. The judge wrote that his testimony was “replete with misdirection and outright lies.”
Apple said in a statement, “we strongly disagree with the decision. We will comply with the court’s order and we will appeal.”
Epic Games Chief Executive Tim Sweeney called the judge’s order a significant win for developers and consumers.
Sweeney told reporters, “It forces Apple to compete with other payment services rather than blocking them, and this is what we wanted all along.”
Sweeney said Epic Games would aim to bring back Fortnite to the Apple App Store next week. Apple had pulled Epic’s account in 2020. This happened after the company let iPhone users navigate outside Apple’s ecosystem for better payment deals.
Epic accused Apple of stifling competition for app downloads. They also accused Apple of overcharging commissions for in-app purchases.
In 2021, Gonzalez Rogers found Apple violated a California competition law. She ordered the company to allow developers more freedom to direct app users to other payment options.
Apple failed last year to persuade the U.S. Supreme Court to strike down the injunction.
Epic Games told the court in March 2024 that Apple was “blatantly” violating the court’s order. This includes imposing a new 27% fee on app developers when Apple customers complete an app purchase outside the App Store. Apple charges developers a 30% commission fee for purchases within the App Store.
Epic Games alleged that Apple also began displaying messages warning customers of the potential danger of external links. This was done to deter non-Apple payments. Epic Games called Apple’s new system “commercially unusable.”
Apple has denied any wrongdoing. The company told Gonzalez Rogers in a court filing on March 7 that it undertook “extensive efforts” to comply with the injunction. They did this “while preserving the fundamental features of Apple’s business model and safeguarding consumers.”
Gonzalez Rogers suggested at an earlier hearing that Apple’s App Store changes had no purpose “other than to stifle competition.”
In Wednesday’s ruling, Gonzalez Rogers said Apple is immediately barred from impeding developers’ ability to communicate with users. The company must not levy its new commission on off-app purchases.
She said Apple cannot ask her to pause her ruling “given the repeated delays and severity of the conduct.” She took no view on whether a criminal case should be opened.
“It will be for the executive branch to decide whether Apple should be deprived of the fruits of its violation, in addition to any penalty geared to deter future misconduct,” the judge wrote.
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