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TAKEAWAYS KEY
- A federal judge ruled that Apple had violated an antitrust ruling relating to its control over the App Store. He ordered Apple to loosen restrictions.
- U.S. District judge Yvonne Gonzalez Rogers criticized Apple CEO Tim Cook as well and alleged that another executive lied on oath.
- Apple, who will announce its second-quarter results after the bell rings, said that it would appeal.
A federal court ruled Apple (AAPL), a tech company, had violated a ruling on antitrust related to its control of the App Store. The judge ordered Apple to loosen restrictions.Apple, which will report its second-quarter earnings at the bell, has said it will appeal.
Judge Yvonne Gonzalez Rogers of U.S. District Court for Northern District of California criticized Apple for not complying with a previous decision that Apple could not block developers from directing their users to alternative payment methods. She also criticised Apple CEO Tim Cook. She also claimed that another executive had lied under oath.
Judge Yvonne Gonzalez Rogers stated that Apple “willfully chose not to comply” with the court’s injunction. “It was done with the explicit intent to create anticompetitive barriers.”
She said Apple “conducted its anticompetitive behavior solely to maintain their 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 comes after a multi-year antitrust case brought forth by videogame developer Epic Games, which sought to change the way Apple charges third party developers on its App store. In an earlier ruling, Judge Gonzales Rodgers had ordered Apple that developers could direct users to alternative payment methods to avoid Apple’s 30% fee. The Court explicitly found “Apple’s original 30% commission rate” was unjustified. [commission] The ruling stated that the company’s operating margins were “supercompetitive” because of its 30 %… rate.
Oppenheimer analysts said this week's "landmark decision" could have a "moderate negative impact on Apple's Service revenue and operating income."
