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

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

Lily JamaliReporting fromSan Francisco

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FILE PHOTO: An Apple logo hangs above the entrance to the Apple store on 5th Avenue in the Manhattan borough of New York City, July 21, 2015. REUTERS/Mike Segar/File Photo

Apple is asking an appeals court to pause a US district judge’s recent ruling in a case which could determine the future of its highly lucrative App Store.

Judge Yvonne Gonzalez Rogers found last week the tech giant wilfully violated an order she had previously made in a case filed by Fortnite-maker Epic Games.

That order – handed down in 2021 – demanded Apple refrain from anti-competitive conduct and pricing and allow outside payment options in the App Store.

Last week she determined Apple was flouting that demand – a finding Apple has now called “extraordinary.”

The iPhone has maker alleged in a court filing that her order unlawfully prevents the company from controlling “core aspects of its business operations.”

Case origins

Both of Judge Gonzalez Rogers’ judgements stem from an antitrust case filed by Epic Games.

In 2020, Epic accused the iPhone-maker of possessing an ******** monopoly with its App Store, which collected commissions of between 15% and 30% on in-app purchases.

The judge rejected Epic’s monopoly claims, but found Apple was stopping developers from giving users alternative payment options in violation of California competition rules.

She ordered Apple to make changes that would help developers steer customers to cheaper payment options outside of the Apple ecosystem.

Last year, Epic accused Apple of failing to comply by creating a new set of fees for developers instead.

In a contempt order last week, Judge Gonzalez Rogers found that Apple continued to interfere with competition, saying that internal company documents showed Apple deliberately violated her 2021 injunction.

‘Substantial sums’

On Wednesday, Apple requested an appeals court take action, including by lifting a ban that stops it from charging developers fees on purchases made outside the App Store.

The company wrote that such restrictions “will cost Apple substantial sums annually” and are based on conduct that has not been found unlawful.

“Rather, they were imposed to punish Apple for purported non-compliance with an earlier state-law Injunction that is itself invalid,” Apple wrote.

Apple did not directly addresses Judge Gonzalez Rogers’ stunning rebuke of company executives.

In her most recent order, she said CEO Tim Cook ignored executive Phillip Schiller’s urging to have Apple comply with her injunction, and allowed then-Chief Financial Officer Luca Maestri to convince him not to.

“Cook chose poorly,” she wrote.

The company documents she reviewed reveal “that Apple knew exactly what it was doing and at every turn chose the most anticompetitive option”, she wrote.

Apple said last week it would comply with the court’s order while it appeals.

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