Apple Under Threat: Criminal Investigation Looms Over App Store Practices

Apple’s legal troubles due to anticompetitive practices are escalating, as a judge has forwarded a criminal case against the company to federal prosecutors for breaching regulations imposed to ensure fair revenues from parts of the App Store where they have an almost monopolistic control.

According to the new rule, Apple is prohibited from charging commissions for transactions occurring outside the app or preventing developers from informing their users about alternate payment methods that enable them to avoid fees associated with purchases within the App Store, where the company currently takes a cut of up to 30% on every transaction.

“Apple deliberately decided against adhering to this Court’s injunction,” stated U.S. District Judge Yvonne Gonzalez Rogers. “Its intention was clear: to establish fresh competitive obstacles aimed at sustaining a profitable income source—a revenue flow previously deemed anticompetitive. The belief that the court would accept their defiance proved to be a significant error. Typically, attempting to conceal wrongdoing only exacerbates the situation.”

The court’s decision will enable firms throughout Hollywood, such as Spotify, to connect with reduced pricing and payment options, permitting them to circumvent Apple’s commission.

Following an antitrust case involving Apple and
Fortnite
In 2021, creator Epic Games reported that Apple breached California’s laws against unfair competition through restrictive practices that “limit consumers’ options.” However, she did not conclude that the company held an unlawful monopoly position. The judge permitted the firm to postpone adjustments to the App Store payment regulations as they pursue an appeal with the U.S. Supreme Court; however, this court chose not to take up the case previously.

The court’s injunction was meant to take immediate effect; however, Apple kept engaging in anticompetitive behavior as per the order. The document highlighted that the firm imposed a 27 percent fee on out-of-app transactions, whereas they had formerly not charged anything for such activities.

Contrary to Apple’s statements in court, internal company papers showed that they “were fully aware of their actions and consistently opted for the least competitive choices,” according to Gonzalez, who also highlighted that Apple Vice President of Finance Alex Roman blatantly perjured himself during his testimony. Internally, Phil Schiller, head of the App Store, pushed for compliance with the court order; however, he was overridden by CEO Tim Cook.

The court has directed the matter to the U.S. Attorney’s Office for the Northern District of California to explore the possibility of initiating criminal contempt proceedings.

For approximately 15 years, Apple has levied a tax in the form of a 30 percent fee on the cost of apps purchased through the App Store as well as on all in-app transactions. The company can enforce this rate against businesses throughout Hollywood that utilize its internal payment method for billing customers. This practice has led to resistance from several organizations within these industries, particularly those reliant on recurring payments to fund production and compensate contributors.

In 2018, Netflix stopped permitting subscribers to sign up via iOS devices as a way of avoiding charges. By 2023, the company compelled certain users who continued to make monthly payments through the App Store to include another form of payment so they could maintain access to their accounts. Back in 2022, when attempting to buy an audiobook inside the app, Spotify presented iPhone users with this barrier: “If you wish to listen, we regret to inform you that purchasing audiobooks directly within the application isn’t possible.”

On a tweet posted on X, Tim Sweeney, CEO of Epic Games, announced that Fortnite would be returning to the App Store the following week. Additionally, he stated, “Epic proposes a truce: Should Apple extend the court’s zero-friction, tax-free arrangement globally, we’ll reinstate Fortnite in the App Store universally and cease all present and upcoming legal actions regarding this matter.”

The previous year, the Justice Department initiated a groundbreaking antitrust lawsuit against Apple, partly due to concerns about its increasing influence in Hollywood. Alongside 16 states and Washington D.C., federal authorities claimed that Apple abuses its dominant position in the smartphone sector through strategies designed to lock customers into using their iPhones and discourage them from choosing competing products—a situation they argue has had negative repercussions for the entertainment business. The department cautioned that without intervention, this could significantly hamper competition and creativity within fields such as film and television production, highlighting how Apple’s growing presence as both an innovator and content creator poses substantial risks.