Apple funded a “sham” independent economic study and had at least one of its executives lie on the stand to defend the company’s up-to-30% commission on in-app purchases — reports The New York Times.
Last week, Judge Yvonne Gonzalez Rogers sided with Epic Games in its antitrust lawsuit against Apple, finding the latter in “willful violation” of a 2021 injunction prohibiting the company from blocking rival payment methods in iOS apps. According to court records, Judge Gonzalez Rogers was furious with Apple for withholding company documents under the guise of attorney-client privilege.
These documents revealed that Apple had paid economic consultant Analysis Group to “manufacture” an independent study justifying the company’s slightly reduced 27% commission on in-app purchases processed through third-party payment systems. They also showed that Alex Roman, a VP of Finance at Apple, lied before the court about when the tech giant had decided on the 27% commission.
After Judge Gonzalez Rogers ruled in 2021 that Apple would have to allow third-party payment options for in-app purchases, the company considered two options: allowing developers to link to external payment methods with no Apple fees in restricted spaces, or letting them advertise third-party payment options anywhere but charging a 27% commission on sales.
According to court records, Apple CEO Tim Cook evaluated both alternatives and commission options ranging between 20-27% with the team in charge of the project in June 2023. Eventually, he approved a 27% commission rate and also greenlit a plan to restrict where developers could publish links to external purchase options.
Apple then paid Analysis Group to publish a study showing that the iPhone maker’s developer tools and distribution services were worth more than the 30% it charges developers for them. Later, Roman testified that Apple didn’t decide on its commission until January 16, 2024.
When the court asked Apple to back these claims up with documents about its plans, the company tried withholding about one-third of 89,000 company documents over claims of confidentiality.
Apple was ultimately compelled to hand over more than half of the documents, which revealed that Roman had lied under oath and that the Analysis Group study was a farce. Judge Gonzalez Rogers blasted Apple for its behaviour in court, calling the company’s conduct a “cover-up.”
Apple is appealing Judge Gonzalez Rogers’s decision. The court ruling found Apple in civil contempt, which the company on Wednesday said was “unwarranted.”
The ruling will have long-ranging implications for other ongoing lawsuits and regulatory proceedings against Apple and its App Store dominance. Apple is currently fielding an antitrust lawsuit from the U.S. Department of Justice, a class action lawsuit from U.S. app developers, and anti-monopoly probes from regulators in the European Union, U.K., Spain, and potentially China — and the company’s credibility in every single one just took a nosedive.
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Like with Trump supporters. lying is perfectly fine these days as long it's from someone in position of authority like Tim Cook and other oligarchs. But nobody wants to talk about this. Kudos to Nehal for posting.