Epic Games CEO Tim Sweeney is still far from getting everything he originally wanted from his war over iOS app store payments, but he just won a huge victory as a US court has bodied Apple for violating a 2021 injunction, going so far as to refer the iPhone maker's behavior to criminal prosecutors.
When Epic started its war with Apple, it wanted to use its own payment processing system in Fortnite on iOS, bypassing Apple's 30% fee. Epic lost that battle in a 2021 trial, but the US courts ruled in its favor on one point: Apple was told it couldn't stop iOS app developers from directing users to out-of-app websites that use their own payment processors.
Since then, Sweeney has been complaining that Apple has not truly complied with the court's will, and after reviewing the evidence, the court has come down firmly on Sweeney's side.
"Apple's response to the Injunction strains credulity," reads today's order from judge Yvonne Gonzalez Rogers. "After two sets of evidentiary hearings, the truth emerged. Apple, despite knowing its obligations thereunder, thwarted the Injunction's goals, and continued its anticompetitive conduct solely to maintain its revenue stream."
"We strongly disagree with the decision," an Apple spokesperson told PC Gamer in response to a request for comment. "We will comply with the court's order and we will appeal."
Instead of simply allowing developers to link to out-of-app payment systems in response to the original injunction, Apple introduced a 27% commission on those out-of-app payments. Apple also added "scare" screens that seemed to warn users away from out-of-app purchases, something Sweeney has also complained about with regard to Apple's compliance with a related European law.
Epic did not think Apple was truly abiding by the injunction, and an evidentiary hearing took place in 2024 to look into it. According to today's order, the court became concerned that Apple was not being entirely truthful about how it came up with that 27% fee, and told it to produce documents related to its injunction compliance planning. Apple stalled, but a second hearing took place earlier this year, and the court did not like what it saw.
"Remarkably, Apple believed that this Court would not see through its obvious cover-up" in 2024's hearing, wrote the district judge, who also stated that Apple VP of finance Alex Roman "outright lied under oath"—a matter she has referred to the regional US attorneys office "to investigate whether criminal contempt proceedings are appropriate."
Roman's testimony was "replete with misdirection and outright lies," said the judge. For instance, he testified that Apple had not considered the external payment processing costs developers would also be paying when it came up with its 27% commission for out-of-app purchases. Evidence revealed to the court showed that Apple was aware of those costs, "which conveniently exceeded the 3% discount Apple ultimately decided to provide by a safe margin."
And the fee itself was a violation of the injunction. According to the court, Apple executive Phil Schiller understood this and opposed the fee, but "Tim Cook ignored Schiller and instead allowed Chief Financial Officer Luca Maestri and his finance team to convince him otherwise."
"Cook chose poorly," wrote the judge.
Following today's order, Apple will have no more leeway unless it succeeds in its appeal: There will be no more fees for out-of-app iOS purchases in the US, not just for Epic, but for any developer.
"This is an injunction, not a negotiation," reads the order. "There are no do-overs once a party willfully disregards a court order. Time is of the essence. The Court will not tolerate further delays. As previously ordered, Apple will not impede competition. The Court enjoins Apple from implementing its new anticompetitive acts to avoid compliance with the Injunction. Effective immediately Apple will no longer impede developers' ability to communicate with users nor will they levy or impose a new commission on off-app purchases."
Sweeney still hasn't gotten what he originally wanted—the ability to include his own payment processor directly in the app—but that hasn't been on the table in the US since that original 2021 ruling. After this victory, he says he's ready for peace.
"We will return Fortnite to the US iOS App Store next week," Sweeney tweeted today. "Epic puts forth a peace proposal: If Apple extends the court's friction-free, Apple-tax-free framework worldwide, we'll return Fortnite to the App Store worldwide and drop current and future litigation on the topic."
