Back in 2021, Apple mostly won the antitrust case that Epic brought against it, and the Ninth Circuit largely agreed. The court rejected most claims about Apple’s App Store being an illegal monopoly. The company just had to make one small change: let developers tell users they could make purchases elsewhere. Simple enough.
Instead, Apple apparently decided that the best response was to design elaborate schemes to make that “elsewhere” as scary and expensive as possible, hide evidence of those schemes from the court, and then lie under oath about all of it. This strategy has worked out about as well as you’d expect, leading to what may be one of the most scathing judicial opinions you’ll ever read.
As we noted at the time, this seemed like the correct outcome. Many of the antitrust claims from Epic seemed ridiculous and the court agreed, but the provisions forbidding app developers from even communicating to users that it was possible to do non in-app purchases seemed extremely restrictive and problematic.
Apple should have been happy with this result. But Apple apparently was not. Yesterday, District Court Judge Yvonne Gonzalez Rogers issued one of the most scathing rulings I’ve ever seen a court issue, calling out what appears to be Apple’s willful decision to disobey the injunction and play games to avoid doing the little bit it was required to do.
Let’s let the judge take it from here:
To summarize: One, after trial, the Court found that Apple’s 30 percent commission “allowed it to reap supracompetitive operating margins” and was not tied to the value of its intellectual property, and thus, was anticompetitive. Apple’s response: charge a 27 percent commission (again tied to nothing) on off-app purchases, where it had previously charged nothing, and extend the commission for a period of seven days after the consumer linked-out of the app. Apple’s goal: maintain its anticompetitive revenue stream. Two, the Court had prohibited Apple from denying developers the ability to communicate with, and direct consumers to, other purchasing mechanisms. Apple’s response: impose new barriers and new requirements to increase friction and increase breakage rates with full page “scare” screens, static URLs, and generic statements. Apple’s goal: to dissuade customer usage of alternative purchase opportunities and maintain its anticompetitive revenue stream. In the end, Apple sought to maintain a revenue stream worth billions in direct defiance of this Court’s Injunction.
In stark contrast to Apple’s initial in-court testimony, contemporaneous business documents reveal that Apple knew exactly what it was doing and at every turn chose the most anticompetitive option. To hide the truth, Vice-President of Finance, Alex Roman, outright lied under oath. Internally, Phillip Schiller had advocated that Apple comply with the Injunction, but Tim Cook ignored Schiller and instead allowed Chief Financial Officer Luca Maestri and his finance team to convince him otherwise. Cook chose poorly. The real evidence, detailed herein, more than meets the clear and convincing standard to find a violation. The Court refers the matter to the United States Attorney for the Northern District of California to investigate whether criminal contempt proceedings are appropriate.
Cook chose poorly? Yikes. Being referred for criminal contempt? Double yikes.
This is an injunction, not a negotiation. 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.
Ouch.
Apple has a history of engaging in malicious compliance to regulatory requirements, but this seems particularly egregious.
The court’s ruling reveals a deliberate three-part strategy by Apple: First, design a system that would appear compliant while actually maintaining their monopoly. Second, hide evidence of this strategy through dubious privilege claims. And finally, when caught, lie about it under oath.
The deliberate nature of Apple’s defiance is perhaps best captured in internal communications about their “scare screen” strategy.
In Slack communications dated November 16, 2021, the Apple employees crafting the warning screen for Project Michigan discussed how best to frame its language. (CX-206.) Mr. Onak suggested the warning screen should include the language: “By continuing on the web, you will leave the app and be taken to an external website” because “‘external website’ sounds scary, so execs will love it.” (Id. at .2.) From Mr. Onak’s perspective, of the “execs” on the project, Mr. Schiller was at the top. (Feb. 2025 Tr. 1340:4–6 (Onak).) One employee further wrote, “to make your version even worse you could add the developer name rather than the app name.” (CX-206.4.) To that, another responded “ooh – keep going.”
Again, Apple decided on the most anticompetitive option, that is, the “even worse” option of including the developer’s name rather than the app name … All of this was hidden from the Court and not revealed in the May 2024 evidentiary hearings.
Apple folks tried to claim that when they said “scary” they didn’t mean “scary” and really said that “scary” was “a term of art” rather than what everyone knows it means:
Mr. Onak testified that “in term of UX writing, the word ‘scary’ doesn’t . . . mean the same thing as instilling fear.” (Feb. 2025 Tr. 1340:10–12 (Onak).) Rather, “scary” is a term of art that “means raising awareness and caution and grabbing the user’s attention.” (Feb. 2025 Tr. 1340:13– 15 (Onak).) Mr. Onak repeatedly asserted that the team’s goal was simply “to raise caution so the user would have all the facts so that they can make an informed decision on their own.” (Feb. 2025 Tr. 1340:22–1341:2 (Onak).) Mr. Onak’s testimony was not credible and falls flat given reason, common sense, and the totality of the admitted exhibits. The designers’ discussions contextualize their use of the word “scary” to indicate its ordinary meaning and, most applicable here, indicate the goal of deterring users as much as possible from completing a linked-out transaction.
Beyond the psychological manipulation through the UI, Apple’s strategy centered on implementing a 27% commission on outside purchases — just a 3% discount from their usual rate for on-platform purchases — while knowing full well this would make external payment options economically unviable for developers.
Apple senior management held a meeting after the injunction was upheld by the Ninth Circuit, in which notes were taken, discussing two options: one where they didn’t charge for off-platform purchases (but which “would restrict the placement and appearance” of any links to off-AppStore purchasing options). The other one, which they went for, was to let them place the info more broadly, but take a 27% cut, rather than a 30% cut.
Unfortunately for Apple, the notes for that meeting noted that a reason to reject the first proposal was that it would “create competitive pressure.” As the judge notes: that was exactly the point of the injunction, to create competitive pressure. So, Apple’s meeting to figure out how to minimize competitive pressure can be seen as seeking to get around the injunction.
And then, on top of that, Apple went with a combination of both proposals to make it designed to stymie the injunction’s purpose. They included the link-out restrictions from the first proposal AND the commission from the second proposal.
Even more damning, Apple’s internal notes reveal that Apple (most likely correctly) predicted that the 3% discount on commissions wouldn’t be economically viable, because the cost to run your own payment setup would likely exceed that 3%. And, Apple already knew that no one would sign up for this because they had used similar off-site commission programs in Korea and the Netherlands:
At the time, Apple also knew of the virtually nonexistent adoption rates of the Netherlands and Korea programs. Those, similar to the at-issue program, additionally suggested to Apple the non-viable economics of the proposed program. See Feb. 2025 Tr. 1407:1-5 (“Q. [F]or example, as of October 2022, ten months into the Netherlands program and four months into the Korea program, only one developer had signed up for alternative payments across the two programs. A. That seems roughly correct, yes.”) (Oliver).
If you only have one developer, you don’t have to say “roughly correct.” There’s no estimating there.
But amazingly, it gets worse. Apple’s internal documentation more or less admits that they might be violating the injunction with this approach:
Crucially, at this point, Apple’s notes reflect uncertainty about whether it could in fact impose a commission without violating the Injunction. In one slide deck, Apple’s notes explain that “[i]f we decided and had the ability to charge a commission, we believe there would be very little developer adoption of link-out, assuming a scenario where we would give a cost of payments discount at 3%.” (CX-859.33 (emphasis supplied).) Those same notes indicate that Apple planned to “[c]ome up with a couple of models in the spectrum of what we think the judge will accept” but to “[s]tart with the minimum.”
The judge also points out that the exec who was pushing for the “no commission” approach, Phil Schiller, had closely followed the trial and read the injunction, while the execs pushing for the sketchy commission approach had not.
Prior to the June 20 meeting, there were individuals within Apple who were advocating for a commission, and others advocating for no commission. (Feb. 2025 Tr. 1521:3–12 (Oliver).) Those advocating for a commission included Mr. Maestri and Mr. Roman. (Id. 1522:3–10 (Oliver).) Mr. Schiller disagreed. (Id. 1521:13–18 (Oliver).) In an email, Mr. Schiller relayed that, with respect to the proposal for “a 27% commission for 24 hours,” “I have already explained my many issues with the commission concept,” and that “clearly I am not on team commission/fee.” (CX-224.1.)29 Mr. Schiller testified that, at the time, he “had a question of whether we would be able to charge a commission” under the Injunction, a concern which he communicated. (Feb. 2025 Tr. 1177:24–1178:9 (Schiller).) Unlike Mr. Maestri and Mr. Roman, Mr. Schiller sat through the entire underlying trial and actually read the entire 180-page decision. That Messrs. Maestri and Roman did neither, does not shield Apple of its knowledge (actual and constructive) of the Court’s findings.
When faced with judicial scrutiny of these practices, Apple didn’t just defend its actions — it launched an extraordinary campaign of document suppression and delay tactics that would ultimately backfire spectacularly.
As testimony unfolded, and Apple attempted to justify its response, the Court became increasingly concerned that Apple was not only withholding critical information about its business decision for complying with the Injunction, but also that it had likely presented a reverse-engineered, litigation-ready justification for actions which on their face looked to be anticompetitive. The Court immediately ordered Apple to produce all injunction-compliance related documents
And then Apple appeared to play games in providing the demanded documents:
Apple engaged in tactics to delay the proceedings. The Court later concluded that delay equaled profits. By September 30, 2024, Apple represented that it had produced around 89,000 documents out of the 1.5 million it had reviewed and expected to produce a few thousand more by October 7, 2024. (Dkt. No. 1024.) Apple, however, had asserted privilege over more than a third of responsive documents….
Magistrate Judge Hixon largely found Apple’s privilege claims to be unsubstantiated after reviewing eleven exemplar documents (characterized by Epic as evidence of Apple’s overreach). (Dkt. No. 1056.) Apple used this decision to delay further and “offered” to re-review all 57,000 documents for which it claimed privilege in full or in part. Ultimately, Apple withdrew approximately 42.1% of its privilege claims. Although Apple now tries to recast its re-review as “of its own accord,” that framing belies the reality that the documents should have never been withheld in the first instance. (Dkt. No. 1151 at 5–6.) Ultimately, Epic and Apple hired three special masters to review Apple’s privilege claims after its re-review.
But Apple’s strategy of obstruction eventually crumbled, revealing something even more serious: executives appearing to deliberately lie under oath.
The judge describes how Apple hired some consultants, “Analysis Group” or “AG,” to conduct research on the value of their platform to try to find justification for the 27% costs charged to developers. They then told the court that they used that analysis as the basis of what to charge, even though the notes now prove that the decision was actually made about six months earlier. In other words, Apple execs appear to have lied under oath.
On top of that, Apple execs claimed that they hadn’t evaluated if external costs of a developer running their own payment setup would exceed the 3% discount, even though it has since come out that they very much did do that analysis, and it was a key part of the decision to only discount commissions by 3%. More lies:
Despite its own considerable evaluation, during the first May 2024 hearing, Apple employees attempted to mislead the Court by testifying that the decision to impose a commission was grounded in AG’s report. (See, e.g., May 2024 Tr. 544:16–24 (Oliver); see also Dkt. No. 1324, Apple Trial Brief at 12.) The testimony of Mr. Roman, Vice President of Finance, was replete with misdirection and outright lies. He even went so far as to testify that Apple did not look at comparables to estimate the costs of alternative payment solutions that developers would need to procure to facilitate linked-out purchases.
The Court finds that Apple did consider the external costs developers faced when utilizing alternative payment solutions for linked out transactions, which conveniently exceeded the 3% discount Apple ultimately decided to provide by a safe margin. (See CX-265.27 (Apple’s estimates of external costs for developers); Feb. 2025 Tr. 1627:15–1628:10 (Vij) (discussing external costs).) Apple did not rely on a substantiated bottoms-up analysis during its months-long assessment of whether to impose a commission, seemingly justifying its decision after the fact with the AG’s report.
Also, given that the decision to charge 27% commissions happened in July of 2023, and the AG report was only delivered in January of 2024 (well after the decision was made), the same Apple exec then apparently lied and claimed the commission decision was made after the report was delivered, which the now-revealed notes show was just blatantly false:
Mr. Roman did not stop there, however. He also testified that up until January 16, 2024, Apple had no idea what fee it would impose on linked-out purchases:
Q. And I take it that Apple decided to impose a 27 percent fee on linked purchases prior to January 16, 2024, correct?
A. The decision was made that day.
Q. It’s your testimony that up until January 16, 2024, Apple had no idea what — what fee it’s going to impose on linked purchases?
A. That is correct. (May 2024 Tr. 202:12–18 (Roman).)
Another lie under oath: contemporaneous business documents reveal that on the contrary, the main components of Apple’s plan, including the 27% commission, were determined in July 2023.
Neither Apple, nor its counsel, corrected the, now obvious, lies. They did not seek to withdraw the testimony or to have it stricken (although Apple did request that the Court strike other testimony). Thus, Apple will be held to have adopted the lies and misrepresentations to this Court.
Ouch.
There’s a lot more as well, but the judge is rightly pissed off. She has issued an injunction making it pretty clear that Apple has to knock off all its tricks:
PERMANENTLY RESTRAINS AND ENJOINS Apple Inc. and its officers, agents, servants, employees, and any person in active concert or participation with them, from:
- Imposing any commission or any fee on purchases that consumers make outside an app, and as a consequence thereof, no reason exists to audit, monitor, track or require developers to report purchases or any other activity that consumers make outside an app;
- Restricting or conditioning developers’ style, language, formatting, quantity, flow or placement of links for purchases outside an app;
- Prohibiting or limiting the use of buttons or other calls to action, or otherwise conditioning the content, style, language, formatting, flow or placement of these devices for purchases outside an app;
- Excluding certain categories of apps and developers from obtaining link access;
- Interfering with consumers’ choice to proceed in or out of an app by using anything other than a neutral message apprising users that they are going to a third-party site; and
- Restricting a developer’s use of dynamic links that bring consumers to a specific product page in a logged-in state rather than to a statically defined page, including restricting apps from passing on product details, user details or other information that refers to the user intending to make a purchase.
Normally, I would say some of those go a bit far in limiting certain things that Apple would be expected to do, but… given just how much Apple tried to lie and mislead the court, it’s kinda what you’d expect. It also says it will not put a stay on this assuming Apple appeals “given the repeated delays and severity of the conduct.”
While Apple also has to pay for the special master that it and Epic had to bring in to review the falsely claimed “privileged” documents, there aren’t any other sanctions (nor did Epic seek them). And that’s why there’s a criminal referral.
What makes this ruling so remarkable isn’t just the scathing language or even the criminal referral — it’s the sheer pointlessness of Apple’s defiance. The company had won almost all of this case. All it had to do was make one small change. Instead, its executives chose to lie, obstruct, and treat the judicial system with contempt. Even with Tim Cook’s recent cozying up to Trump and the Trump/Bondi Justice Department’s tendency to view justice through the lens of personal loyalty (which might help make the criminal referral disappear), it’s hard to understand what Apple thought it would gain through such brazen actions.
Yes, Apple managed to drag out its monopoly rents on app commissions for a bit longer. But it could have crafted a more open system that would have satisfied the court while preserving significant control over its platform (along with the associated commissions) — all without executives potentially facing criminal contempt charges. The short-term profits from delay hardly seem worth the cost of credibility with courts and regulators going forward.
As Judge Gonzalez Rogers put it simply: Tim Cook chose poorly.
Filed Under: alex roman, antitrust, app store, competition, contempt, criminal contempt, in app purcases, luca maestri, obstuction, phil schiller, tim cook, yvonne gonzalez rogers
Companies: apple
