Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Civil contempt for Apple for willful violation of injunction with respect to anti-steering provisions, (May 2, 2025)

By Seth Abrams, J.D., M.A.

The court strongly criticized Apple for its actions and referred the matter for investigation of whether criminal contempt proceedings are appropriate.

The federal district court in Oakland found Apple Inc. in civil contempt for its willful violation of a September 2021 injunction in its litigation with Epic Games, Inc. The injunction was issued to restrain and prohibit Apple’s anticompetitive conduct and anticompetitive pricing with respect to in-app and out-of-app purchases. The court found that Apple responded to the injunction by defying it by choosing the “most anticompetitive option” at every turn. The court also found that, after ordering production of real-time documents and holding additional hearings in 2025, an Apple executive “outright lied under oath” and referred the matter to the U.S. Attorney for the Northern District of California to investigate whether criminal contempt proceedings are appropriate (Epic Games, Inc. v. Apple Inc., No. 4:20-cv-05640-YGR (N.D. Cal. Apr. 30, 2025)).

The trial court entered judgment in September 2021, finding that Apple’s anti-steering rules violated the California Unfair Competition Law under its unfair prong. It issued an injunction regarding the anti-steering provisions. After losing on appeal to the Ninth Circuit, Apple filed a petition for a writ of certiorari with the Supreme Court. Prior to the injunction coming into effect, Apple filed a notice of compliance with the injunction. It had three key components: (1) a “new policy charging developers 27% on link-out purchases instead” of In-App Purchasing’s (“IAP”) 30%; (2) “Various restrictions on the manner and mode of communicating with customers which were distinctly less user-friendly than otherwise allowed; and (3) “exclusions on the concurrent participation in other programs that offered discounted commissions.” In January 2024, the Supreme Court denied Apple’s petition, and the injunction came into effect.

In March 2024, Epic moved to enforce the injunction, hold Apple in civil contempt, and have Apple remove all anti-steering provisions. In April 2024, the Court set an evidentiary hearing in which “as testimony unfolded, and Apple attempted to justify its response, the Court became increasingly concerned that Apple was... withholding critical information about its business decision for complying with the injunction.” In addition, the court stressed that Apple “had likely presented a reverse-engineered, litigation-ready justification for actions which looked on their face to be anticompetitive.” As a result, the court ordered Apple to produce all injunction-related documents. The court stressed that Apple engaged in dilatory tactics—initially asserting privilege over more than a third of the responsive documents. Ultimately, Apple withdrew about 42% of its privilege claims. The court noted that the “delay equaled profits.” In February 2025, a second evidentiary hearing was held.

Apple’s changes in response to injunction. Apple imposed a 27% commission on link-out purchases—a new charge where none had existed before. It added new external purchase link placement and design restrictions and requirements that induced purchase-flow friction. It also added limitations on developers’ ability to use calls to action. The court noted that the 27% commission was again “tied to nothing” like the 30% commission on IAPs that the court had found to be anticompetitive. The court found that Apple’s goal was clear; it sought to “maintain its anticompetitive revenue stream. Next, as part of the injunction, the court had “prohibited Apple from denying developers the ability to communicate with, and direct consumers to, other purchasing mechanisms.” It found that Apple’s response was to “impose new barriers and new requirements to increase breakage rates with full page “scare” screens, static URLs, and generic statements.” To the court, Apple’s goal was clear: “to dissuade customer usage of alternative purchase opportunities and maintain its anticompetitive revenue stream.” The court found Apple to be in direct defiance of the court’s injunction. It noted that Apple CEO Tim Cook was presented with the choice to comply with the injunction but chose otherwise.

Remedy. The court stressed that “this is an injunction, not a negotiation” and that “there are no do-overs once a party willfully disregards a court order.” The court enjoined Apple from implementing its new anticompetitive acts and ordered, effective immediately, that Apple will “no longer impede developers’ ability to communicate with users nor will they levy or impose a new commission on off-app purchases.” The court pre-authorized the “dialogue” version of Apple’s screen when leaving for on-app purchases. This dialogue box indicates that you are leaving to go to the Safari App but is not a full page scare screen.

Apple also was sanctioned the full cost of the special masters’ review and Epic’s attorney’s fees on that issue through May 2025 due to its abuse of attorney-client privilege designations.

Potential criminal contempt. The court additionally noted that “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.” The court described “outright lies under oath” by an Apple executive. As a result, it referred the matter to the United States Attorney for the Northern District of California to investigate the appropriateness of criminal contempt proceedings against either Apple or the executive. The court took no position on whether criminal prosecution is warranted.

The Case is No. 4:20-cv-05640-YGR.

Judge: Rogers, Y.

Attorneys: Benjamin Hans Diessel (Wiggin and Dana LLP) for Epic Games, Inc. Jason C. Lo (Gibson, Dunn & Crutcher LLP) for Apple Inc.

Companies: Epic Games, Inc.; Apple Inc.

MainStory: TopStory Antitrust CaliforniaNews