The complaint against Apple Inc. was referred for a possible criminal contempt investigation after Judge Yvonne Gonzalez Rogers ruled that Apple violated an earlier ruling against this practice. The satisfied judge has ruled that the tech Goliath willfully violated an injunction. This injunction came as the result of a lawsuit filed by Epic Games, the developer of the wildly popular game Fortnite. This decision has serious implications for Apple’s respect for and compliance with federal court orders, and its current actions in the newly competitive app economy.
The legal saga started back in 2021. Epic Games claimed that Apple should allow for third-party payment systems to be used for in-app purchases. With a nationwide injunction already in place to foster competition, Apple nevertheless pressed ahead with the same conduct that Judge Gonzalez Rogers found to be anticompetitive. In his ruling, the judge underscored that what Apple had done “is not to be countenanced,” stressing that the violations were serious.
Judge Gonzalez Rogers issued a contempt order against Apple after reviewing internal documents that suggested the company deliberately disregarded the court’s directive. Specifically, she stated that Apple “knew exactly what it was doing and at every turn chose the most anticompetitive option.”
It was some of the most surprising testimony in last week’s ruling by a federal judge against Apple’s actions. The judge went on to call this testimony an absolute perjury. This shocking disclosure has tremendous ethical implications related to corporate governance at Apple.
According to statements reported by The New York Times, Cook personally sidelined advice from Apple executive Phillip Schiller to honor the injunction. Instead, Apple’s CFO Luca Maestri reportedly convinced Cook not to adhere to the court’s order, further complicating the company’s legal standing.
Apple attempted to work around the injunction by imposing a 27% commission on all purchases not made within its app. Many critics believe that this acquisition hinders competition, harms innovation and breaches fair trading standards.
“Cook chose poorly,” – Judge Yvonne Gonzalez Rogers
Epic Games’ realization of this fact, evident in the broader strategy behind their case against Apple, has profound implications for the app economy. We commend the company for this positive public step. It does still seem to be hunting for a deal with Apple and fishing for Fortnite’s return to the App Store. Tim Sweeney, CEO of Epic Games, indicated a willingness to resolve the issue if Apple agrees to extend its current payment framework globally.
“Epic puts forth a peace proposal: 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,” – Tim Sweeney
This is a very fast-moving situation. As to the criminal referral against Apple, we’ll just need to stay tuned to see how the U.S. Attorney for the Northern District of California responds to Judge Gonzalez Rogers’ referral regarding potential criminal contempt proceedings.
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