A U.S. judge has found Apple intentionally violated a court order prohibiting it from anti-competitive conduct. Held in civil contempt of court, the tech giant is also facing an investigation for criminal contempt, with one of its executives even accused of "outright [lying] under oath."
On Wednesday, California District Court judge Yvonne Gonzalez Rogers issued a scathing order calling out Apple for "willful violation" of a 2021 injunction. This injunction had been issued as part of Epic Games' ongoing antitrust lawsuit against Apple, in which the Fortnite developer argued that iOS apps should be allowed to offer in-app payment processing methods other than Apple Pay.
At the time, the court ordered that Apple could not prevent app developers from directing users to alternate payment options. It also found that the 30 percent commission Apple had been charging on in-app purchases was anti-competitive, and thus would no longer be allowed.
However, Apple allegedly implemented some workarounds, according to Wednesday's court order. Gonzalez Rogers said that after the 2021 ruling, Apple began to charge a 27 percent commission on off-app purchases — a fee which hadn't previously existed. The order further stated that Apple had attempted to steer customers away from alternate, non-Apple payment methods with barriers such as "full page 'scare' screens, static URLs, and generic statements."
"Apple, despite knowing its obligations thereunder, thwarted the Injunction’s goals, and continued its anticompetitive conduct solely to maintain its revenue stream," wrote Gonzalez Rogers.
"This is an injunction, not a negotiation. There are no do-overs once a party willfully disregards a court order."
"Cook chose poorly."
Gonzalez Rogers also called out specific Apple executives, writing that vice-president of finance Alex Roman attempted to mislead the court by providing testimony "replete with misdirection and outright lies." Noting that neither Apple nor its lawyers corrected Roman's testimony, the judge ruled that "Apple will be held to have adopted the lies and misrepresentations to this Court."
Not all Apple's executives are accused of having attempted to skirt the law, with internal documents cited in the order revealing that executive Phillip Schiller argued Apple should comply with the injunction. Unfortunately, they also showed that CEO Tim Cook allegedly chose to follow the "lucrative approach" advice of Chief Financial Officer Luca Maestri instead, which was "advocating for a commission."
"In stark contrast to Apple’s initial in-court testimony, contemporaneous business documents reveal that Apple knew exactly what it was doing and at every turn chose the most anticompetitive option," Gonzalez Rogers wrote. "Internally, Phillip Schiller had advocated that Apple comply with the Injunction, but Tim Cook ignored Schiller and instead allowed Chief Financial Officer Luca Maestri and his finance team to convince him otherwise.
"Cook chose poorly."
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Apple is now facing the consequences of that decision, with the court referring both the company and Roman specifically to the U.S. Attorney for investigation of criminal contempt. The company must also cease its alleged injunction workarounds.
"Apple willfully chose not to comply with this Court’s Injunction," wrote Gonzalez Rogers (emphasis original). "It did so with the express intent to create new anticompetitive barriers which would, by design and in effect, maintain a valued revenue stream; a revenue stream previously found to be anticompetitive.
"That it thought this Court would tolerate such insubordination was a gross miscalculation. As always, the cover-up made it worse. For this Court, there is no second bite at the apple."
In a statement, Apple said that it "strongly disagree[s]" with the court's decision, and intends to appeal.
Of course, Epic Games is much more pleased with the outcome. In the wake of Wednesday's order, CEO Tim Sweeney announced that it now plans to bring Fortnite back to iOS in the U.S. next week. Apple removed Fortnite from its app store back in 2020, though last year it made a return for players in the EU.
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"Epic puts forth a peace proposal: If Apple extends the court's friction-free, Apple-tax-free framework worldwide, we'll return Fortnite to the App Store worldwide and drop current and future litigation on the topic," Sweeney posted to X.
