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Apple is facing escalating legal difficulties following a federal judge’s directive demanding the tech giant explain its alleged non-compliance with a court injunction in its noteworthy antitrust battle with Epic Games. This case highlights critical issues surrounding App Store policies, third-party developer restrictions, and antitrust lawsuits.
Judge Orders Apple to Explain App Store Compliance
In a strongly worded order issued on Monday, U.S. District Judge Yvonne Gonzalez Rogers instructed Apple to appear in court and justify why it should not face penalties for reportedly disregarding the 2021 injunction. This original injunction mandated Apple to ease App Store restrictions imposed on external developers.
“Obviously, Apple is fully capable of resolving this issue without further briefing or a hearing,” the judge noted.
The order, submitted in the U.S. District Court for the Northern District of California, stipulates that an Apple representative “personally responsible for ensuring compliance” must attend court on May 27 “if the parties do not file a joint notice that this issue is resolved…”
This order follows a motion from Epic Games seeking enforcement of the initial injunction, which required Apple to permit developers to incorporate external links or buttons in their apps to enable alternative payment methods, bypassing Apple’s proprietary in-app purchase system.
Alleged Non-Compliance with Injunction Terms
According to Judge Rogers, Apple has reportedly failed to honor the terms of that ruling and continues to enforce conditions on developers that undermine the court’s intention.
“This is an injunction, not a negotiation,” she stated in a prior ruling. “There are no do-overs once a party willfully disregards a court order.”
Internal Disagreement and Allegations of Misconduct
The judge’s censure extended to Apple CEO Tim Cook, who she asserted rejected internal recommendations to adhere to the injunction. The legal scrutiny examines the broader implications for antitrust lawsuits against tech companies.
Key Allegations Include:
- Rejection of Internal Advice: Rogers stated that Philip Schiller had advocated internally for Apple to comply with the injunction.
- Executive Override: Tim Cook disregarded Schiller’s advice, allegedly allowing Chief Financial Officer Luca Maestri and his finance team to influence the decision.
- Accusations of Lying Under Oath: Rogers accused Apple’s vice president of finance, Alex Roman, of perjury during the trial, stating that Apple “adopted the lies and misrepresentations to this Court.”
The court has granted Apple until Wednesday to file a response explaining why Epic’s motion to enforce the injunction should not be approved.
Epic’s rebuttal must be submitted by Friday.
If the entities fail to reach an agreement and jointly notify the court, the specified Apple official must attend the hearing in person at the Oakland federal courthouse.
Background of the Apple vs. Epic Games Dispute
Apple previously stated, “We strongly disagree with the decision. We will comply with the court’s order and we will appeal.”
The dispute began in 2020 when Epic Games, the creator of “Fortnite,” initiated a lawsuit against Apple for alleged monopolistic behavior related to the App Store policies.
In 2021, Judge Rogers largely sided with Apple but issued an injunction preventing the company from blocking developers from informing users about alternative payment methods. This injunction is at the core of the ongoing legal clash.
Contradictory Testimony and Fee Structures
The court alleges that Apple devised a 27% commission fee for purchases made outside its ecosystem — a fee allegedly designed to surpass any expenses developers might incur using third-party payment methods. The core of this dispute focuses on antitrust lawsuits and whether Apple maintained fair competition.
Roman purportedly testified falsely that Apple had not assessed those expenses, but internal documentation suggested otherwise.
The judge also determined Apple finalized its external purchase fee structure by July 2023, contradicting Roman’s sworn testimony that the policy wasn’t finalized until January 2024.
Potential Consequences and Industry Impact
The order to demonstrate cause adds to the strain on Apple, as Judge Rogers has directed the matter to the U.S. Attorney’s Office for potential criminal contempt charges against the company and implicated individuals.
Epic Games CEO Tim Sweeney hailed the judgment.
“It’s a huge victory for developers,” he said. “This forces Apple to compete. This is what we wanted all along.”
The upcoming hearing on May 27 could represent a pivotal moment for Apple as it faces greater examination of its App Store policies and executive actions, potentially reshaping the standards for third-party apps and payment systems within the Apple ecosystem. This scrutiny has broad implications for future antitrust lawsuits in the tech sector.
Requests for comments from Apple and Epic Games remain unaddressed.