In a landmark ruling, Apple has been referred for a potential criminal contempt investigation by U.S. District Judge Yvonne Gonzalez Rogers. The case emerges from an ongoing legal battle instigated by Epic Games, the well-known developer of the popular video game Fortnite. Judge Gonzalez Rogers has accused Apple of willfully violating a prior injunction that was designed to block what was seen as anticompetitive behavior, allowing the App Store to open up to alternative payment options outside of Apple’s own ecosystem.
The discussion intensified over Apple’s policies, which require developers to use its in-app purchasing system, taking up to a 30% commission on purchases. In her judgment, Judge Gonzalez Rogers emphasized that Apple had effectively ignored her injunction meant to enhance competition and consumer choice in payments, labeling the conduct as unacceptable. She has called upon the U.S. Attorney for the Northern District of California to explore whether a criminal contempt proceeding against Apple is warranted, given the severity of the allegations.
Upon learning of the judge’s decision, Apple responded assertively, stating, “We strongly disagree with the decision. We will comply with the court’s order and we will appeal.” This declaration reflects Apple’s persistent determination to challenge the ruling and maintain its existing policies despite the court’s findings.
The basis for Judge Gonzalez Rogers’s ruling stems from a trial decision in 2021, which saw Epic Games argue for the allowance of third-party payment options on the App Store. The lawsuit aimed at dismantling what Epic referred to as a monopolistic hold on app sales and the stipulations imposed on developers. Notably, Judge Gonzalez Rogers’s earlier decision indicated that Apple could no longer prevent developers from linking to their own payment mechanisms, enabling practices such as encouraging customers to subscribe through external websites, circumventing Apple’s costly buying arrangements.
In the recent contempt order, Judge Gonzalez Rogers discovered that Apple had taken measures contrary to her injunction, which included a suspect commission rate of 27% on certain off-app purchases despite previously charging nothing. Moreover, internal documents reviewed by the court showed that Apple had deliberately chosen options deemed anticompetitive. It was revealed that CEO Tim Cook neglected counsel from executive Phillip Schiller regarding compliance with the injunction, instead allowing CFO Luca Maestri to persuade him against it.
The judge explicitly expressed disappointment with Cook’s decision-making, underscoring that there was a deliberate intent to violate her court orders. Furthermore, Apple’s vice president of finance, Alex Roman, was accused of providing false information under oath during the proceedings, compounding the legal issues surrounding the company’s practices.
In a surprising turn of events, Epic Games’ CEO Tim Sweeney took to social media platform X, suggesting a conciliatory approach towards Apple. He proposed that if Apple were to extend the changes dictated by the court’s ruling globally—effectively removing the so-called “Apple Tax”—Epic Games would return Fortnite to the iOS App Store and cease any ongoing or future litigation related to these issues.
Sweeney’s statements firmly indicated that Epic Games views the significant commission fees levied by Apple as unlawful, mirroring similar sentiments across Europe under the recently enacted Digital Markets Act. His remarks hint at a broader struggle not only between Epic Games and Apple but illustrate a growing backlash against the commission structures that dominate app marketplaces globally.
This ongoing saga, characterized by intense legal scrutiny and the push for competitive fairness in digital commerce, signifies a crucial chapter in the ongoing narrative surrounding technology giants, consumer rights, and fair market practices. The outcome of the investigation could potentially reshape the landscape of app distribution and payment systems well beyond Apple and Epic Games.