In a significant legal development, Apple has been referred for a potential criminal contempt investigation after being found in violation of a court injunction established in a case involving Epic Games.
Apple Faces Possible Criminal Contempt Charges for Violating Court Ruling
Apple Faces Possible Criminal Contempt Charges for Violating Court Ruling
US District Judge cites willful transgressions by Apple, leading to a referral for investigation.
A US District Court judge has determined that Apple intentionally breached her injunction related to anti-competitive practices involving the App Store, which was intended to allow alternative payment methods for consumers. Judge Yvonne Gonzalez Rogers announced her decision to refer the case to the US Attorney for the Northern District of California, suggesting the possibility of a criminal contempt investigation. This came after it was revealed that a senior Apple executive had "outright lied" in court.
Apple has contested the ruling, stating they "strongly disagree" with the decision and intend to appeal. The injunction stems from a lawsuit initiated in 2021 by Epic Games, known for its popular video game Fortnite. Epic argued against Apple's monopolistic control over app purchases, claiming that the 30% commission levied on transactions was excessive.
In her previous ruling, Judge Gonzalez Rogers mandated that Apple could no longer prevent developers from linking to external payment methods outside of the App Store. For instance, streaming services could guide customers to subscribe via their own websites as opposed to relying solely on Apple's payment system.
In a contempt order issued on Wednesday, the judge revealed that internal Apple documents indicated the company willfully disregarded the injunction. She noted, "Apple knew exactly what it was doing and at every turn chose the most anticompetitive option." The decision involved criticism of CEO Tim Cook, who allegedly ignored advice from executive Phillip Schiller to comply with the court order, while CFO Luca Maestri persuaded him otherwise.
The judge also called out Apple's Vice President of Finance Alex Roman for providing false testimony. Notably, Apple’s alleged violations included imposing a new 27% commission on off-app purchases instead of adhering to the previous no-fee policy, further implementing barriers to deter customers from using alternative payment platforms.
In response to the unfolding situation, Epic Games founder Tim Sweeney announced plans to reinstate Fortnite on the US iOS App Store next week, extending an olive branch to Apple. Sweeney proposed that if Apple adopts a worldwide framework allowing frictionless, fee-free transactions, Epic would conclude current and future litigation on the matter, labeling Apple's commission structure as "dead" in the U.S. and Europe under regulatory standards.
