By Adam Levine

A U.S. District Judge rebuked Apple Wednesday night saying Apple ignored an injunction tied to the company's U.S. App Store. The issue stems from a 2021 trial in which Epic Games had sued Apple on antitrust grounds.

While Apple had largely prevailed at trial, it was required to make changes to the App Store to allow alternative processors for in-app payments, which have come to dominate App Store revenue. The case worked its way though appeals, and the injunction against Apple was finally in force in January 2024.

In the Wednesday ruling, Judge Yvonne Gonzalez Rogers noted that Apple continued to take a 27% commission on the alternative payments, versus its usual 30%, while also taking steps to discourage use of the alternative systems.

Rogers has referred the case to the U.S. Attorney for the Northern District of California for possible criminal contempt charges.

"Apple's response to the Injunction strains credulity," Rogers wrote. "Apple, despite knowing its obligations thereunder, thwarted the Injunction's goals, and continued its anticompetitive conduct solely to maintain its revenue stream.

Rogers added: "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."

She called on Apple to comply with the injunction immediately.

"This is an injunction, not a negotiation," she wrote.

Apple stock fell 1.7% in after-hours trading following the ruling.

Investors have closely watched Apple's services revenue in recent years. "At risk here is the $6B in U.S. App Store revenue that Apple generates, but we think the actual impact will be lower given many developers will continue to prefer Apple's system," Evercore analyst Amit Daryanani wrote late Wednesday.

He notes that the loss of U.S. App Store revenue would result in a 30-cent hit to Apple's earnings per share, roughly 4% of its fiscal 2025 profits.

Apple didn't immediately reply to a request for comment.

Write to Adam Levine at adam.levine@barrons.com

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April 30, 2025 21:12 ET (01:12 GMT)

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