Apple referred to prosecutors after violating App Store order in Epic Games case

A US federal judge has referred Apple to criminal prosecutors after finding the tech giant deliberately violated her court order requiring it to change its App Store rules.

In a scathing 80-page ruling issued on Wednesday, judge Yvonne Gonzalez Rogers accused the iPhone maker of “wilfully” disregarding her previous injunction in its long-running legal battle with Epic Games, the maker of Fortnite.

“Apple wilfully chose not to comply… with the express intent to create new anti-competitive barriers which would, by design and in effect, maintain a valued revenue stream,” Gonzalez Rogers wrote, adding: “This was a gross miscalculation. As always, the cover-up made it worse.”

The case stems from a 2020 antitrust lawsuit brought by Epic Games challenging Apple’s control over its App Store, which generates an estimated $8.6bn in global quarterly revenue. While Apple largely won the original case, the judge ordered the company to allow developers to direct customers to alternative payment methods outside the App Store.

Instead of complying, Apple created a new system that still imposed a 27 per cent commission on external purchases and implemented pop-up warnings that discouraged users from leaving the App Store ecosystem.

“Apple sought to maintain a revenue stream worth billions in direct defiance of this court’s injunction,” the judge wrote.

Gonzalez Rogers has now ordered that Apple must immediately stop collecting any fees on purchases made outside the App Store and cannot restrict how developers link to external payment options.

In a particularly damning section of the ruling, the judge accused Apple vice-president of finance Alex Roman of having “outright lied under oath” during testimony about the company’s compliance efforts. She also criticised chief executive officer Tim Cook for ignoring advice from Phil Schiller, who oversees the App Store.

“Cook chose poorly,” she wrote, noting that internal documents showed “Apple knew exactly what it was doing and at every turn chose the most anti-competitive option.”

Apple responded in a statement: “We strongly disagree with the decision. We will comply with the court’s order and we will appeal.”

Tim Sweeney, chief executive officer of Epic Games, called the ruling “a wonderful, wonderful day for everybody” and announced that Fortnite would return to the App Store next week. The popular game was removed in 2020 when Epic deliberately bypassed Apple’s payment rules.

“It forces Apple to compete with other payment services rather than blocking them, and this is what we wanted all along,” Sweeney told reporters.

The judge has referred the matter to the United States Attorney for the Northern District of California to investigate whether criminal contempt proceedings are appropriate.