A federal judge ruled that Apple violated her previous 2021 ruling requiring developers to allow third-party payment systems on the App Store and ordered it to immediately stop charging fees for transactions made outside of its platform, Bloomberg reported. In the 80-page ruling, Northern District of California Judge Yvonne Gonzalez Rogers also referred the case to the U.S. Attorney General’s Office in San Francisco for possible criminal prosecution for disobeying her previous ruling.
The dispute began with a lawsuit by Epic Games, which challenged Apple's fees for purchases within the App Store. After Judge Rogers ruled in 2021 that Apple's requirement to use only its payment system was anticompetitive under California law, she ordered the company to allow developers to bypass the 27% to 30% fee. Despite the US Supreme Court's refusal to review the case in 2023, Apple continued to charge fees on redirected transactions, which the judge said was a "grave error" in understanding the validity of her order.
"It did so with the express intent to create new anticompetitive barriers which would, by design and in effect, maintain a valued revenue stream," Judge Rogers said. "That it thought this court would tolerate such insubordination was a gross miscalculation."
The court also found that Apple attempted to conceal its unenforceable ruling, and that Vice President of Finance Alex Roman knowingly made false statements about its evaluation of alternative payment solutions.
Apple shares fell about 1.6% in after-hours trading after the ruling was announced. In a brief statement, the company expressed its "strong opposition" to the ruling and promised to comply with all court orders and immediately appeal. Epic Games CEO Tim Sweeney called the ruling "huge victory for developers," adding that it "forces Apple to compete with other payment services rather than blocking them."
The court also ordered Apple to reimburse Epic Games for its legal fees in connection with obtaining documents that the company had illegally withheld. The court also criticized Apple for abusing attorney-client privilege to withhold information from the case.
The case of Epic Games Inc. v. Apple Inc. (No. 20-cv-05640) remains open in Rogers Court, which will monitor the company's compliance with the measures adopted and await possible actions by the prosecutor's office regarding criminal contempt.