U.S. District Judge Yvonne Gonzalez Rogers found Apple Inc. AAPL and one of its top executives in contempt of court, accusing them of deliberately evading a 2021 injunction meant to curb the tech giant's control over App Store payments.
What Happened: Rogers said Apple’s vice president of Finance, Alex Roman, "outright lied under oath" about when the company decided to impose a 27% commission on certain web-based purchases made through iPhone apps — a move she deemed anticompetitive and in violation of her prior order, reported CNBC.
"Neither Apple, nor its counsel, corrected the, now obvious, lies," Rogers wrote.
The judge also accused Apple of withholding internal documents, including records of a 2023 meeting involving CEO Tim Cook, where compliance with the injunction was discussed.
She also noted that Phil Schiller, an Apple fellow and former senior vice president, had opposed the commission policy, but Cook overruled him. "Cook chose poorly," Rogers wrote.
Rogers has referred the matter to the U.S. Attorney's Office to consider criminal contempt charges against both Roman and Apple, the report said.
She also ordered the company to immediately stop charging commissions on purchases made through in-app web links and to pay Epic Games' legal fees related to the dispute.
"This is an injunction, not a negotiation. There are no do-overs once a party willfully disregards a court order," Rogers stated.
In a statement, an Apple spokesperson said, "We strongly disagree with the decision. We will comply with the court's order and we will appeal," the report added.
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Why It's Important: Following the court’s decision, Epic Games CEO Tim Sweeney made a bold proposal to Apple on X, offering to end all related litigation if the company broadens its compliance.
To meet Epic's demands, Apple would have to eliminate its global commissions on purchases made outside its App Store and remove limitations on linking to external payment options. Such changes could significantly impact Apple's services revenue.
Apple is set to report its fiscal second-quarter earnings on Thursday. Analysts expect the company to deliver stronger-than-expected results, particularly in its iPhone segment and Chinese market. Wall Street forecasts revenue of $94.42 billion for the quarter, up from $90.75 billion a year ago.
Price Action: Apple shares gained 0.61% during Wednesday's regular session but dropped 1.65% in after-hours trading, closing at $209, per Benzinga Pro data.
According to Benzinga Edge's Stock Rankings, Apple holds a growth score of 44.64% and a momentum score of 74.99%. Click here to see how it stacks up against other leading tech stocks.
Photo Courtesy: Prathmesh T On Shutterstock.com
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