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 willfully 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 maker has alleged in a court filing that her order unlawfully prevents the company from controlling “core aspects of its business operations.”
“A federal court cannot force Apple to permanently give away free access to its products and services, including intellectual property,” the company’s lawyers wrote.
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 illegal 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.
In response, Epic Games said Judge Gonzalez Rogers’ contempt order last week was already benefiting consumers.
“Apple has faced a surge of genuine competition as developers have updated their apps with better payment methods, better deals, and better consumer choice,” Epic wrote in a post on the social media platform X.
The company criticized Apple’s motion as “a last ditch effort to block competition and extract massive junk fees at the expense of consumers and developers.”
Epic says it is on track with plans to bring Fortnite back to iPhones and iPads.
Apple removed Fortnite from its App Store in 2020 after Epic unveiled an in-app payment system into the game.
The move led to the current court battle between the two companies.
Apple did not directly addresses Judge Gonzalez Rogers’ stunning rebuke of company executives in its court filing.
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.
Judge Gonzalez Rogers said she would refer the matter to the US Attorney for Northern District of California to investigate if a criminal contempt proceeding against Apple is appropriate.
Apple said last week it would comply with the court’s order while it appeals.
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