In a major blow to Cupertino, a judge ruled Wednesday that Apple “willfully chose not to comply” with a 2021 injunction that required the company to let developers include in-app links directing users to third-party payment options on the web.
“Apple’s continued attempts to interfere with competition will not be tolerated,” said U.S. District Judge Yvonne Gonzalez Rogers in the ruling.
She also found clear evidence that an Apple executive lied under oath in his court testimony, and asked U.S. attorneys to investigate whether Apple’s vice president of finance should be charged with criminal contempt of court.
Judge slams Apple for willful violation of injunction
In 2021, as part of the Apple vs. Epic Games saga, the court ordered Apple to allow developers to link to external payment processors within their apps. Ideally, this would have allowed developers to collect payments from their customers without incurring any transaction fees from Apple.
However, Apple being Apple, the company required developers to pay a commission of 12% to 27% on these transactions. Even the mechanism for allowing such external payments might prove so onerous that developers take a pass. This includes filing an external Link Entitlement request form with the relevant information. Plus, this option is only available on the iOS and iPadOS App Store in the United States
Unsurprisingly, the judge called out Apple for this anticompetitive behavior.
“Apple’s response to the Injunction strains credulity,” Gonzalez Rogers wrote. “After two sets of evidentiary hearings, the truth emerged. Apple, despite knowing its obligations thereunder, thwarted the Injunction’s goals, and continued its anticompetitive conduct solely to maintain its revenue stream. Remarkably, Apple believed that this Court would not see through its obvious cover-up (the 2024 evidentiary hearing).”
Apple must make immediate changes to the App Store
The court ruled that, effective immediately, Apple cannot take any commission or fee on purchases made by users outside of the App Store. The ruling also states that Apple cannot place restrictions on the style, formatting or placement of the external link.
Other actions now forbidden to Apple:
- Prohibiting or limiting the use of buttons or other calls to action, or otherwise conditioning the content, style, language, formatting, flow or placement of these devices for purchases outside an app;
- Excluding certain categories of apps and developers from obtaining link access;
- Interfering with consumers’ choice to proceed in or out of an app by using anything other than a neutral message apprising users that they are going to a third-party site;
- Restricting a developer’s use of dynamic links that bring consumers to a specific product page in a logged-in state rather than to a statically defined page, including restricting apps from passing on product details, user details or other information that refers to the user intending to make a purchase.
In a statement to The Verge, Olivia Dalton, Apple’s senior director of corporate communications, said, “We strongly disagree with the decision. We will comply with the court’s order and we will appeal.”
Apple executive under fire
Gonzalez Rogers also said that Apple Vice President of Finance Alex Roman lied during his testimony in the Epic Games v. Apple trial, and that Apple “adopted the lies and misrepresentations to this Court.”
”In stark contrast to Apple’s initial in-court testimony, contemporaneous business documents reveal that Apple knew exactly what it was doing and at every turn chose the most anticompetitive option,” the judge wrote. “To hide the truth, Vice-President of Finance, Alex Roman, outright lied under oath. Internally, Phillip Schiller had advocated that Apple comply with the Injunction, but Tim Cook ignored Schiller and instead allowed Chief Financial Officer Luca Maestri and his finance team to convince him otherwise. Cook chose poorly. The real evidence, detailed herein, more than meets the clear and convincing standard to find a violation.”
As a result, both Roman and Apple now face potential charges of criminal contempt of court. Both could face fines, but there’s the possibility of jail time for Roman.
You can read Gonzalez Rogers’ blistering 80-page opinion (.pdf) in its entirety.
Rajesh has been closely following and writing about the latest happenings in the world of mobile for nearly a decade now. While he prefers Android, he does not deny the superiority of Apple’s products and ecosystem.
