Apple Violated Court Order in Epic Games Case, Judge Finds Apple VP "Outright Lied" Under Oath
In a scathing 80-page ruling released Wednesday, U.S. District Judge Yvonne Gonzalez Rogers found that Apple willfully violated her 2021 injunction in the Epic Games case and accused an Apple executive of lying under oath. The ruling represents a significant development in the years-long legal battle between the tech giant and Epic Games, with potential far-reaching implications for Apple's App Store business model.
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The Court's Findings
Judge Gonzalez Rogers determined that Apple deliberately circumvented her original 2021 ruling, which required the company to allow app developers to direct users to alternative payment methods outside the App Store. "Apple's continued attempts to interfere with competition will not be tolerated," Gonzalez Rogers stated, emphasizing, "This is an injunction, not a negotiation. There are no do-overs once a party willfully disregards a court order."
The judge was particularly harsh in her assessment of Apple's conduct, finding that the company had implemented a new system that technically allowed external links but still imposed a 27% commission on purchases made through those links—only slightly less than the standard 30% App Store fee. Rather than truly opening up the market for app payments as intended by the original ruling, Apple was accused of constructing "a program that nullified the revenue impact of the Injunction by prohibiting any viable alternative."
Executive Misconduct and Potential Criminal Consequences
In one of the most extraordinary aspects of the ruling, Judge Gonzalez Rogers accused Alex Roman, Apple's vice president of finance, of providing testimony that was "replete with misdirection and outright lies" regarding when Apple decided on its controversial 27 percent commission fee for purchases made outside the App Store.
The judge wrote that "contemporaneous business documents reveal that Apple knew exactly what it was doing and at every turn chose the most anticompetitive option. To hide the truth, Vice-President of Finance, Alex Roman, outright lied under oath."
The ruling further revealed that Apple senior executive Phil Schiller had advocated for the company to comply with the injunction, but CEO Tim Cook disregarded this advice, instead following recommendations from CFO Luca Maestri and his finance team.
The severity of these findings has led Judge Gonzalez Rogers to refer both Apple and Roman to the United States Attorney for the Northern District of California for a potential criminal contempt investigation.
Immediate Changes Ordered
The judge's order has immediate implications for Apple's App Store policies. Effective immediately, "Apple will no longer impede developers' ability to communicate with users nor will they levy or impose a new commission on off-app purchases." This means developers can now freely direct users to alternative payment methods without facing Apple's 27% commission or having to implement Apple's restrictive UI requirements.
Under the new ruling, Apple cannot collect any fee or commission for purchases that consumers make outside of an app, nor can it track, audit, or monitor consumer activity related to these external purchases.
Implications for Developers and Consumers
Epic Games CEO Tim Sweeney called the ruling a significant victory. "It's a huge victory for developers, and it means all developers can offer their own payment service side-by-side with Apple's payment service," Sweeney stated. "This forces Apple to compete." The Epic CEO also indicated that the company plans to bring Fortnite back to the iOS App Store as early as next week.
The ruling could substantially alter the economics of the iOS app ecosystem, potentially allowing developers to bypass Apple's payment system entirely, without facing penalties or restrictions. This could lead to lower prices for consumers as developers would no longer need to factor Apple's commission into their pricing.
Apple's Response
In a brief statement following the ruling, Apple said: "We strongly disagree with the decision. We will comply with the court's order and we will appeal." The company now faces the challenging task of implementing these significant changes to its App Store policies while pursuing an appeal.
Background of the Case
The case originated in 2020 when Epic Games deliberately violated Apple's App Store rules by implementing an alternative payment system in Fortnite, bypassing Apple's 30% commission. Apple responded by removing Fortnite from the App Store, prompting Epic to file an antitrust lawsuit.
While Apple largely prevailed in the original 2021 trial, Judge Gonzalez Rogers did rule that Apple's "anti-steering" provisions—which prohibited developers from informing users about alternative payment options—violated California's competition laws. The judge ordered Apple to allow developers to include links and buttons to external payment options.
Looking Forward
This ruling represents a significant setback for Apple's App Store business model, which has been under increasing regulatory scrutiny worldwide. While industry analysts suggest that the immediate financial impact may be manageable, the potential long-term implications for Apple's services revenue stream could be substantial if developers widely adopt external payment systems.
The case also raises questions about possible criminal contempt proceedings against Apple and its vice president of finance, adding a new dimension to what was already a landmark antitrust case in the tech industry.
As this legal battle continues through the appeals process, developers and consumers alike will be watching closely to see how these changes reshape the mobile app ecosystem.
