Apple hits back at US judge’s ‘extraordinary’ contempt order

Apple is challenging a US judge’s contempt order after being accused of violating a 2021 ruling in its ongoing legal battle with Fortnite-maker Epic Games. The dispute stems from a lawsuit filed by Epic Games in 2020, accusing Apple of holding a monopoly over its App Store. While the court rejected Epic’s monopoly claims, Judge Yvonne Gonzalez Rogers ruled that Apple was engaging in anti-competitive behavior by preventing developers from offering alternative payment methods outside the App Store. In response, she issued an injunction in 2021 that demanded Apple allow outside payment options and refrain from anti-competitive conduct. However, last week, the judge determined that Apple had wilfully ignored the order, citing internal company documents that suggested the tech giant was intentionally flouting the injunction.

Apple has now filed an appeal, calling the ruling “extraordinary” and arguing that the judge’s order unlawfully interferes with its business operations. The company’s lawyers contend that the decision violates Apple’s right to control key aspects of its business, including its products and intellectual property. The legal team argued that the injunction should not compel Apple to provide free access to its services or products, as that could be detrimental to the company’s operations.

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The legal case originally arose from the controversy surrounding Apple’s App Store fees, which range between 15% and 30% on in-app purchases. Epic Games filed its lawsuit in 2020, alleging that Apple’s control of the App Store created an illegal monopoly. Although the judge dismissed the monopoly allegations, she ruled that Apple had violated California’s competition laws by blocking developers from offering alternative payment options. This ruling led to a 2021 injunction requiring Apple to make changes to its policies, enabling developers to bypass Apple’s payment system.

In 2022, Epic Games accused Apple of failing to comply with the injunction, claiming that the tech giant introduced new fees for developers instead of following the court’s instructions. This prompted Judge Gonzalez Rogers to issue a contempt order last week, asserting that Apple had continued to impede competition despite the injunction. In her ruling, she noted that internal Apple documents demonstrated the company had intentionally violated the order.

Apple has since requested an appeals court to intervene, asking for the contempt order to be paused and for a ban on charging developers fees for transactions outside the App Store to be lifted. The company argues that the restrictions would cost Apple significant sums of money annually and that the sanctions were imposed as a punishment for non-compliance with the previous injunction. Apple maintains that its actions were not unlawful, and it insists that the earlier injunction was itself invalid.

In addition to challenging the contempt order, Apple has also faced criticism from Judge Gonzalez Rogers for its handling of the case. The judge stated that Apple’s CEO Tim Cook had ignored the advice of company executives, including Phillip Schiller, who had urged compliance with the injunction. Instead, Cook allowed then-CFO Luca Maestri to influence his decision, which the judge described as a “poor” choice. The documents reviewed by the judge showed that Apple knew the consequences of its actions and deliberately chose the most anti-competitive options.

Apple has pledged to comply with the court’s order while it appeals the ruling. The ongoing case continues to have significant implications for both Apple’s business practices and the wider tech industry, with potential ramifications for the future of app stores and digital marketplaces.

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