^{Source: CNN}

In a significant legal development, U.S. District Judge Yvonne Gonzalez Rogers has found Apple Inc. in contempt for willfully violating a 2021 injunction related to its App Store practices. The ruling stems from the ongoing legal battle with Epic Games, the creator of Fortnite, over Apple's control of in-app purchases and restrictions on alternative payment methods.​

Background: The Epic Games Lawsuit

The dispute began in August 2020 when Epic Games challenged Apple's App Store policies, alleging monopolistic behavior and anti-competitive practices. In 2021, Judge Gonzalez Rogers issued an injunction requiring Apple to allow developers to direct users to alternative payment options outside the App Store. The court found that Apple's anti-steering provisions violated California's competition laws by hiding critical information from consumers and stifling choice. ​‍

Apple's Response and Subsequent Violations

In an attempt to comply, Apple introduced a new policy in 2024 permitting developers to include external links for out-of-app purchases. However, the company imposed a 27% commission on such transactions, only slightly less than the standard 30% fee for in-app purchases. Additionally, Apple implemented deterrents like warning screens to discourage users from utilizing alternative payment methods. ​‍

Judge Gonzalez Rogers criticized these actions as deliberate attempts to circumvent the court's order, stating that Apple "knew exactly what it was doing and at every turn chose the most anticompetitive option." She also accused Apple of presenting evidence tailored for litigation rather than reflecting actual internal discussions. ​

Allegations of Perjury and Concealment

The court found that Apple Vice President of Finance Alex Roman "outright lied" under oath regarding the timing of the 27% fee implementation. Furthermore, Apple was accused of withholding documentation of a June 2023 meeting involving CEO Tim Cook about compliance with the 2021 court order. Judge Gonzalez Rogers referred the matter to U.S. attorneys to investigate potential criminal contempt proceedings against both Roman and Apple. ​

Immediate Court Orders and Industry Impact

As a result of the ruling, Apple is required to:​

• Cease imposing the 27% commission on purchases made through web links inside apps.​
• Allow developers to communicate freely with users about alternative payment methods.​
• Pay Epic Games' attorney fees related to this specific issue.​

Epic Games CEO Tim Sweeney hailed the decision as a victory for developers and consumers, emphasizing that it forces Apple to compete and ends excessive fees. ​

Analysts suggest that while the ruling challenges Apple's longstanding business model, the financial impact may be limited. Evercore ISI estimates a potential 4% earnings hit, and Apple's stock remains strong with a market cap of approximately $3.87 trillion. ​

Apple's Position and Future Outlook

Apple has expressed strong disagreement with the court's decision but stated that it will comply with the order and plans to appeal. The company maintains that its commission structure supports app review processes and user security.​

This ruling marks a significant moment in the ongoing debate over digital marketplace practices and could have broader implications for how tech giants manage their platforms.

‍