Apple Inc. is experiencing the repercussions stemming from a recent court decision. This brief but crucial decision may result in significant financial damages to the tech behemoth. Judge Yvonne Gonzalez Rogers found Apple in contempt for violating an earlier court order related to its commission practices on iPhone app purchases. The ruling requires Apple to cease charging commissions on purchases made through web links in apps. This has set off a firestorm of reaction from the company who intends to appeal this unprecedented decision.
As a result of Judge Rogers’ ruling, Apple intentionally misrepresented itself to the court. For their part, she called them out for their decision to slap an extra 27% commission on outside payments. One Apple vice president apparently perjured himself as to the reasons for adopting such a pricing strategy. In spite of these accusations, Apple has failed to refute the claims by Judge Rogers in its recent filings.
This whole mess started with an earlier court case between Apple and Epic Games, which was settled in 2021. In that case, the court ruled against Apple and instructed the company to stop enforcing commissions on purchases made through links in its apps. According to the recent ruling, Apple actually broke this order, resulting in Judge Rogers’ punitive reaction. The ruling already put significant new pressure on Apple. Now, the company will have to scramble to change its controversial linking policy to come into line with California law.
Apple’s CEO, Tim Cook, announced that the company plans to appeal the ruling while maintaining that Apple has complied with the court’s instructions. Cook emphasized to investors that the company is committed to addressing the ruling’s implications, stating that it will take steps to ensure compliance moving forward.
On the one hand, the ruling prohibits commissions on in-app purchases originated through web links. It includes a criminal referral against Apple due to the grave nature of the alleged misconduct. Either way, this very recent development illuminates the gravity of the challenges that Apple is currently up against. The company continues to face strong pressure from the judiciary as well as various regulatory institutions.
We applaud Apple for their efforts to improve compliance. We noticed that they recently revised their Get Book application to include an orange “Get Book” button that links straight to Amazon’s website. This revision is indicative of Apple’s overall strategy to comply with the court’s orders within quite a tangled web of legal hindrances.
Of all the blow-back to this ruling, Apple will be hit worst. The company has little other revenue outside of an estimated $90 billion in app store commissions. The firm warns that the decision risks multi-billion dollar judgments. Their concerns mount over stopped commissions and looming legal costs associated with appeals.