Judge Finds Apple Violated Antitrust Ruling

A federal judge said Apple (AAPL) violated an antitrust ruling linked to the tech firm’s control over its App Store and ordered it to loosen restrictions.Apple, which reports second-quarter earnings after the bell, said it would appeal.

Judge Yvonne Gonzalez Rogers of the U.S. District Court for the Northern District of California criticized Apple for failing to comply with a previous ruling that Apple cannot block developers from directing users to alternative payment options. She also criticized Apple CEO Tim Cook and alleged another executive lied under oath.

“Apple willfully chose not to comply with this court’s injunction,” Judge Yvonne Gonzalez Rogers said. “It did so with the express intent to create new anticompetitive barriers.”

She said Apple “thwarted the Injunction’s goals, and continued its anticompetitive conduct solely to maintain its revenue stream.”

“We strongly disagree with the decision,” an Apple spokesperson told Investopedia. “We will comply with the court’s order and we will appeal.”

The ruling follows a multiyear antitrust case brought by videogame developer Epic Games that sought to change how Apple charges third-party developers on its App Store. In the earlier ruling, Judge Gonzales Rogers had ordered Apple to allow developers to direct users to alternate payment methods that would avoid Apple’s 30% commission rate. The Court explicitly found that “Apple’s initial [commission] rate of 30%… has apparently allowed it to reap supracompetitive operating margins,” the ruling said.

Oppenheimer analysts said this week’s “landmark decision” could have a “moderate negative impact on Apple’s Service revenue and operating income.”