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Apple faces potential criminal contempt investigation for willful violation of injunction

Apple has been dealt a major blow in its lawsuit versus Epic Games. Judge Yvonne Gonzalez Rogers said the tech giant had violated the law as an executive lied under oath about its App Store practices.

A US federal court had imposed an injunction in 2021, that was designed to curb Apple's anticompetitive practices in the App Store, asking it to allow alternate ways to download apps and third-party payment methods. An 80-page court order states that Apple has intentionally undermined the injunction’s goals by implementing new fees and obstacles that continue to suppress competition. In light of these findings, the judge sanctioned Apple for defying the order. The case has also been referred to the U.S. Attorney’s Office for potential criminal contempt proceedings against Apple.

Internal documents revealed during the proceedings suggested a deliberate strategy by Apple to maintain control over its revenue, with Apple’s Vice President of Finance, Alex Roman, found to have lied under oath. 9to5Mac reports that Phil Schiller had recommended compliance, but CEO Tim Cook opted to side with the finance team, disregarding the court's orders. Judge Gonzalez Rogers emphasized that Apple's use of deceptive "scare screens" and static URLs aimed to suppress user transition to more competitive payment methods.

The court’s ruling comes amid an ongoing legal battle with Epic Games, which originally sued Apple in 2020, challenging its restrictive app store policies. Apple has been banned from charging its previously imposed 27% commission on external purchases, and directed the company to stop hindering developers from promoting alternative payment options. Apple strongly disagreed with the court's decision, but has stated that it will comply with the order and appeal the ruling.

Epic’s CEO, Tim Sweeney, lauded the ruling as a major victory, labeling Apple's policies as an illegal “tax” on developers. Last year, Fortnite made a comeback in Europe, but only in Europe, through Epic Games' Mobile App Store which was made possible because of the Digital Markets Act. Now other fans can rejoice, Fortnite is returning to iOS after a 5-year hiatus, Epic Games' CEO confirmed that his company is planning to release the game on the U.S. App Store next week.

Despite his vocal criticism of Apple, Sweeney seemed to be willing to put things behind by saying, “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.”

The ruling marks a turning point in the ongoing confrontation between Apple and developers pushing for fairer practices in the digital marketplace. With the court backing developers’ calls for change, Apple’s current App Store policies may face a broader reevaluation in the wake of this legal challenge. Apple was hit with a €500 Million fine by the European Commission for violating the DMA.

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