By Rolfe Winkler

A federal judge hammered Apple for violating an antitrust ruling related to App Store restrictions and took the extraordinary step of referring the matter to federal prosecutors for a criminal contempt investigation.

"Apple willfully chose not to comply with this court's injunction," Judge Yvonne Gonzalez Rogers said in a ruling late Wednesday that specifically chided Chief Executive Tim Cook and alleged that another company executive lied under oath. "It did so with the express intent to create new anticompetitive barriers."

The order is the latest twist in a long-running legal dispute between Apple and Epic Games, developer of the popular videogame "Fortnite," which accused Apple of monopolistic behavior in a 2021 case related to the tight controls it imposes over app makers.

Rogers largely ruled in Apple's favor in the 2021 case but required the iPhone maker to allow developers to offer users alternate methods for paying for services and subscriptions outside the App Store.

An Apple spokesman didn't respond to a request for comment.

Apple shares fell slightly in after-hours trading following the release of the judge's new order.

"We've been fighting Apple for a long time," said Epic CEO Tim Sweeney. "It's a huge victory for developers."

On Wednesday, she ordered the company to allow developers to steer users to alternate methods of paying for services or subscriptions offered in the App Store. Apple also can no longer impose fees in such scenarios or restrict the ability of software makers to offer links or otherwise communicate alternate payment options with consumers.

She sharply criticized Apple executives, writing that Apple Chief Executive Tim Cook ignored advice from longtime deputy Phil Schiller to comply with her injunction and instead chose to listen to his finance team. "Cook chose poorly," she wrote, adding that Apple's Vice President of Finance Alex Roman "outright lied under oath."

Apple generates billions of dollars in high-margin revenue each year from the fees it collects on in-app purchases. It's unclear the extent to which developers will be able to convince iPhone users to go to their websites to make purchases instead.

iPhone users are conditioned to use the App Store to make digital purchases, and changing their behavior could prove difficult. Some analysts have estimated that many may opt to stay within the confines of the App Store, but that possibility has never really been tested due to the restrictions Apple imposed after the original 2021 ruling.

In 2021, Rogers had ordered Apple to allow app developers to send customers to their own websites in order to get around Apple's fees of up to 30% for in-app purchases.

Apple responded by requiring developers who do so to pay a different 27% fee if they use an alternative payment method. The judge said that fee, and other barriers the company put in place to discourage off-app purchases, "thwarted the injunction's goals, and continued [Apple's] anticompetitive conduct solely to maintain its revenue stream."

Write to Rolfe Winkler at Rolfe.Winkler@wsj.com

(END) Dow Jones Newswires

April 30, 2025 20:22 ET (00:22 GMT)

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