Apple Inc. has found itself in a contentious legal battle following a federal judge’s ruling that the tech giant continued to interfere with competition, violating a 2021 injunction. Judge Yvonne Gonzalez Rogers stated that this behavior was clearly demonstrated by evidence that Apple willfully disobeyed the court’s orders. This prompted Epic Games to accuse the company of not following their prior instructions.
The Judge’s drastic 2021 order made plain the directive to Apple to cease all anti-competitive behavior. It further prevented the company from using discriminatory practices with respect to its App Store pricing. Even so, Apple reportedly instituted a whole new slate of anti-competitive fees for developers instead of complying with the injunction. This latest move has raised even greater privacy questions about Apple’s business practices. Epic Games contends that Apple is keeping an illegal monopoly by preventing any competing app stores or other forms of app distribution on its closed platform.
Judge Gonzalez Rogers stated, “that Apple knew exactly what it was doing and at every turn chose the most anticompetitive option,” highlighting the severity of Apple’s actions. With in-app purchase being the App Store’s only allowed method of app monetization, the App Store commissions of 15% to 30% gutted most developers’ incomes.
In its response to the contempt order, Apple insisted that those findings were “extraordinary.” As the company claimed in a detailed rebuttal, these conclusions amount to punitive damages for purported violations of a past state-law injunction, which Apple argues is unenforceable.
Apple4s legal team is on the offensive. As such, they’ve requested remedy from an appeals court to intervene and remove the ruling’s bar on charging developers a fee for outside-the-App-Store purchases. While Apple was at war with itself internally, then-CFO Luca Maestri reportedly convinced a reluctant CEO Tim Cook to violate the injunction. This request comes out of those conversations. Indeed, reports suggest that Tim Cook personally brushed aside calls from company exec Phillip Schiller begging him to adhere to the court’s order.
The current legal argument exposes troubling issues with Apple’s inappropriate market behavior. Further, it raises key questions for developers building in its ecosystem. The resulting controversy has received enormous media coverage. It raises fundamental questions about fair competition and consumer choice in our evolving digital marketplace.