A federal district judge has referred Apple to the US Attorney for potential criminal contempt proceedings following revelations of willful disregard for court rulings concerning pricing practices in the App Store, particularly regarding outside payment options.
Apple Facing Criminal Contempt Investigation Over Alleged Misconduct
Apple Facing Criminal Contempt Investigation Over Alleged Misconduct
Apple may be investigated for contempt of court after a judge found the company violated an injunction related to anti-competitive practices initiated by Epic Games.
In a dramatic turn of events, a US district judge has found Apple guilty of intentionally violating a previous court injunction aimed at curtailing anti-competitive conduct and enabling external payment alternatives within its App Store. Judge Yvonne Gonzalez Rogers announced that she would forward the case to the US Attorney for the Northern District of California to determine if a criminal contempt proceeding is warranted.
The injunction stems from a 2021 lawsuit filed by Epic Games, the creator of the globally popular game Fortnite, which contended that Apple's practice of taking up to a 30% cut from user purchases represented monopolistic behavior. In her previous ruling, Judge Gonzalez Rogers mandated that Apple must not hinder developers from directing customers to their own payment methods.
However, the judge's latest contempt order disclosed that Apple continued with anti-competitive tactics, which she claimed would be met with strict repercussions. Internal documentation revealed that Apple fully understood its violations, with executives allegedly making conscious choices that contradicted the injunction. Judge Gonzalez Rogers criticized CEO Tim Cook for disregarding advice from senior executive Phillip Schiller, asserting that Cook was convinced by CFO Luca Maestri to ignore compliance. She also highlighted that Apple's vice-president of finance, Alex Roman, had allegedly misled the court under oath.
Apple's strategy to circumvent the injunction included imposing a revised 27% commission on separate-app purchases, despite previously having no such charges. Furthermore, the corporation reportedly established new barriers to hamper customers from utilizing rival payment systems.
In a response to the turn of events, Epic Games founder Tim Sweeney announced plans to reinstate Fortnite in the US iOS App Store next week while extending a proposal to Apple: if the tech giant adopts the court's friction-free framework on a global scale, the ongoing legal disputes would cease. Sweeney expressed that the issue of "Apple’s Tax" would conclude, emphasizing the illegitimacy of Apple's fees, now invalidated under similar regulations in Europe.
