Apple Held in Contempt for Anticompetitive App Store Practices

A judge has found Apple in contempt of court for defying orders related to its App Store payment practices. The ruling stems from the ongoing legal battle with Epic Games, the maker of Fortnite. While Apple largely prevailed in the original case, the court had ordered Apple to allow developers to offer alternative payment options within their apps, bypassing Apple's 30% commission.

Instead of complying, Apple implemented a system that Judge Yvonne Gonzalez Rogers deemed even more anticompetitive. The company reduced its commission to only 27% for external purchases and introduced "scare screens" to discourage users from choosing these options. This tactic effectively maintained Apple's revenue stream while hindering developers' ability to offer competitive pricing.

Judge Criticizes Apple Executives and Tactics

Judge Rogers' 80-page decision sharply criticizes Apple and its executives. She accuses Apple of a "cover-up" and of deliberately thwarting the injunction's goals. The ruling highlights several key points:

  • Apple's VP of Finance, Alex Roman, is accused of lying under oath regarding the company's decision-making process.
  • CEO Tim Cook is criticized for prioritizing financial gains over compliance, siding with former CFO Luca Maestri's advice.
  • The court referred the matter to the U.S. Attorney for potential criminal contempt proceedings.

Key Findings and Quotes from the Ruling

“Apple’s response to the Injunction strains credulity...Apple believed that this Court would not see through its obvious cover-up.”

“Cook chose poorly...The Court refers the matter to the United States Attorney...to investigate whether criminal contempt proceedings are appropriate.”

“This is an injunction, not a negotiation. There are no do-overs once a party willfully disregards a court order.”

Apple's Response and Next Steps

Apple has stated its strong disagreement with the ruling and intends to appeal. However, the court has ordered Apple to immediately cease impeding developers' communication with users and levying commissions on off-app purchases.

This ruling marks a significant development in the ongoing scrutiny of Apple's App Store practices. The judge's strong condemnation and call for further investigation underscore the seriousness of the allegations against Apple.