Apple's antitrust disaster is growing, with judges passing criminal cases against the tech giant to federal prosecutors in violation of court-standard rules to maintain revenue from its border monopoly on the App Store portion.
According to the ruling, Apple is banned from imposing commissions on payments made outside the app, or restricting developers from introducing alternative payment options to users to allow them to bypass sales expenses in the App Store, where the company's total of up to 30% of all transactions.
"Apple intentionally chose not to comply with the court's injunction," wrote U.S. District Court Judge Yvonne Gonzalez Rogers. "This is done with a clear intention to create new anti-competitive barriers, which will maintain a valuable source of income by design and in fact, which was previously considered an anti-competitive source of income. It argues that the court would tolerate such unacceptable misunderstandings is a serious miscalculation. As usual, the cover-up becomes worse."
The court's ruling would allow companies across Hollywood, such as Spotify, to link discount rates and payment methods, allowing them to bypass Apple's commissions.
After an antitrust trial between apples and apples Fortnite Creator Epic Games In 2021, Rogers found that Apple violated California’s unfair competition laws by implementing a policy of “stifling consumer choice”, even though she stopped looking for illegal monopoly. She allowed the company to postpone changes to the App Store payment rules, pending appeals to the U.S. Supreme Court, which refused to review the case last year.
The order said the court's injunction should take effect immediately, but Apple continued to engage in anti-competitive behavior. It noted that the company charged a 27% commission on additional purchases, without any fees before.
In contrast to Apple's on-field testimony, internal business documents show that it "knows exactly what it is doing and chooses the most anti-competitive option in every way." Internally, App Store chief Phillip Schiller argued that Apple complied with the court's injunction, but was rejected by CEO Tim Cook.
The court referred the matter to the U.S. Attorney's Office in the Northern District of California to investigate whether criminal contempt procedures should be initiated.
For nearly 15 years, Apple has charged a 30% commission on the price of apps purchased from the App Store and all in-app purchases. It is able to order these fees from companies across Hollywood that charge users using their in-app payment systems. This has caused obstacles for these companies, some relying on subscription revenue to generate content and paid creators.
Netflix stopped in 2018, allowing customers to subscribe to pay for their fees on iOS devices, forcing some users who still pay monthly fees through the App Store to add a new payment method to keep their account active in 2023. In 2022, Spotify laid brick walls for iPhone users who want to purchase audiobooks from within the app. They came across the message: "Want to hear? You can't buy audiobooks in the app. We know, this is not ideal."
Epic Games CEO Tim Sweeney said in a post on X that Fortnite will return to the App Store next week. He added: “EPIC has proposed a peace proposal: If Apple expands the court’s frictionless, Apple-free tax framework globally, we will return Fortnite to the global App Store and abandon current and future lawsuits on that subject.”
Last year, the Justice Department filed a landmark antitrust lawsuit against Apple, in part aimed at Hollywood. The government joined in 16 states and the District of Columbia, claiming that the company violated antitrust laws by monopolizing the smartphone market, its practice aims to make consumers rely on iPhones and prevent them from switching to competitors’ devices in ways that could deteriorate in the entertainment industry. If not weakened, it warns the company “as a significant risk” to reduce competition and innovation in areas including production, film and television shows, indicating Apple’s “rapidly expanded” role as a producer.