A Breach of Trust: Apple Held in Contempt Over App Store Rules

Late yesterday, U.S. District Judge Yvonne Gonzalez Rogers issued a blistering opinion, concluding that Apple had willfully disregarded the Court’s 2021 injunction, which found that the anti-steering provisions of the App Review Guidelines violated California state law. Judge Gonzalez Rogers also referred Apple’s conduct to the U.S. Attorney to investigate whether criminal prosecution of the company and one of its employees is warranted. For its part, Apple has said it disagrees with the decision and will appeal, but it will comply with the Court’s order in the meantime.

Judge Gonzalez Rogers’ 80-page opinion and order don’t pull any punches, painting a damning picture of Apple’s response to the Court’s injunction.

If that all sounds like it’s a big deal, that’s because it is. Judge Gonzalez Rogers’ 80-page opinion and order don’t pull any punches, painting a damning picture of Apple’s response to the Court’s injunction. It’s a unique and unflattering look behind the curtain at how Apple responded to the Court’s 2021 order that’s worth looking at more closely.

Recap

The litigation between Epic Games and Apple has been ongoing for about five years. Here’s my overview from last year on how it all began:

This whole mess started in the depths of the COVID-19 pandemic when Epic Games decided to manufacture a dispute with Apple by sneaking a store for purchasing Fortnite in-game currency into the mobile versions of that game. Apple removed Fortnite from the App Store, Epic sued, claiming antitrust violations, Apple countersued for violations of its developer agreements, and the rest has unfolded over the course of over three years.

In 2021, Judge Gonzalez Rogers issued an order, finding that Apple wasn’t a monopoly but ruling that the company had violated California state law prohibiting anticompetitive behavior by preventing developers from linking to external purchasing options in their apps. The parties appealed to the Ninth Circuit Court of Appeals, which affirmed the core of Judge Gonzalez Rogers’ decision, disagreeing only with a tangential issue regarding attorneys’ fees. Apple appealed again to the U.S. Supreme Court, which declined to hear the matter on January 16, 2024. The next day, Judge Gonzalez Rogers’ injunction went into effect.

Then, on March 13 of last year, Epic Games filed a motion to enforce the Court’s injunction and hold Apple in civil contempt for violating it, which is where the latest chapter in this epic tale begins.

The Court’s Contempt Order

Judge Gonzalez Rogers held hearings in May 2024 and again earlier this year. The first hearing centered around a report by Analysis Group, a consultancy whose reports Apple has pointed to repeatedly as support for the positive impact of the App Store on developers’ businesses. The Court didn’t buy what Apple and Analysis Group were selling:

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.

(Contempt Order at pgs. 11-12).

The Court’s concern led to the second set of hearings, where it became clear that Apple began planning its response to the Court’s injunction immediately after the Court’s decision was published in 2021 (Contempt Order at pg. 14). Apple is fond of code names, dubbing this initial effort at dealing with the injunction Project Michigan. Later, the working group was renamed Project Wisconsin. Code names like these are often used by Apple when developing new products to preserve secrecy; however, what makes perfect sense for product development is counterproductive when planning compliance with a court order. In that context, it just looks sneaky.

Code names may look bad, but that’s nothing compared to the Court’s finding that evidence from the 2025 hearings told a very different story — one that directly contradicted testimony from the 2024 hearing:

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.

(Contempt Order at pg. 2).

The contradictions between what was offered as evidence by Apple in 2024 and 2025 were so significant in the Court’s eyes that Judge Gonzalez Rogers referred the case to the U.S. Attorney’s Office for criminal investigation of Apple and Alex Roman, the employee that the Court concluded had lied under oath.

In every instance, the Court found that Apple’s response was designed to minimize compliance with its order and maximize the company’s profits to the detriment of developers in a way that violated the order.

Besides concluding that the 2024 hearing was effectively an attempt to cover up the decision-making happening behind the scenes, the Court made specific findings on how Apple’s response to the injunction was a violation. Those findings touched on the 27% commission imposed on “linked-out purchases,” the design of links and buttons, friction imposed in the purchase flow to discourage shopping outside an app, and limitations on developer calls to action. If that sounds like the entirety of the changes made in response to the injunction, that’s because it is. In every instance, the Court found that Apple’s response was designed to minimize compliance with its order and maximize the company’s profits to the detriment of developers in a way that violated the order.

What’s Next?

Unnamed sources at Apple have told 9to5Mac that the company disagrees with the Court’s decision, but will comply and appeal. I doubt that appeal will go anywhere. The Court made it clear that it expected Apple to comply with its contempt order immediately, so an appeal won’t delay that, barring intervention by the Court of Appeals. Given the deference higher courts afford to lower courts enforcing their own orders and the extensive evidentiary record, overturning it on appeal is a long shot.

In the meantime, Apple is prohibited 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;

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.

(Contempt Order at pgs. 75-76).

For developers and users, the Court’s decision opens up new opportunities. For any business where selling inside an app and paying Apple’s fees was economically impossible, linking out offers new choices. We could see Bookshop.org or Amazon link out to the web so users can purchase books. Patreon could use links so creators can charge the same amount in Patreon’s app as on the web. Fortnite should come back to the App Store, too. Plus, we’ll undoubtedly see the release of a whole new set of apps that suddenly make economic sense but didn’t before. That’s the upside of competition.

For Apple, this decision is quite simply devastating – not to its finances, but to its reputation and trust.

For Apple, this decision is quite simply devastating – not to its finances, but to its reputation and trust. The Court’s findings lay bare the corrosive effect that the App Store has had on Apple.

To his credit, Phil Schiller opposed the 27% commission but was overruled by Apple’s finance team, including then-CFO Luca Maestri. Schiller sat through the entire underlying trial and undoubtedly understood what the Judge’s injunction meant better than any other senior executive at Apple, but he was still overruled in favor of remixing the very economic behavior that had been found to be anticompetitive.

I also have to wonder where Apple’s internal lawyers were in all of this. Attorney-client privilege means that most of those lawyers’ interactions with management aren’t public, but a general counsel’s job is to prevent exactly what happened here. That means either management didn’t listen to their own lawyers or those lawyers gave management bad advice, neither of which is good.

Ultimately, though, what the Court’s decision does is further damage Apple’s reputation and trust with developers and, potentially, its users. I doubt most users pay close enough attention to this sort of thing for it to make a big difference to Apple, but a criminal indictment might. Developers, on the other hand, are acutely aware of the App Review Guidelines and the limitations they impose, and it’s hard to see how Apple rebuilds trust with any developer who reads Judge Gonzalez Rogers’ decision and sees how the App Store sausage is made.