Josh Sisco, reporting for Bloomberg:

Apple Inc. violated a court order requiring it to open up the App Store to outside payment options and must stop charging commissions on purchases outside its software marketplace, a federal judge said in a blistering ruling that referred the company to prosecutors for a possible criminal probe.

US District Judge Yvonne Gonzalez Rogers sided Wednesday with Fortnite maker Epic Games Inc. over its allegation that the iPhone maker failed to comply with an order she issued in 2021 after finding the company engaged in anticompetitive conduct in violation of California law.

Gonzalez Rogers also referred the case to federal prosecutors to investigate whether Apple committed criminal contempt of court for flouting her 2021 ruling…

Epic Games Chief Executive Officer Tim Sweeney said in a social media post that the company will return Fortnite to the US App Store next week.

The order is a bloodbath:

To hide the truth, Vice-President of Finance, Alex Roman, outright lied under oath. Internally, Phillip Schiller had advocated that Apple comply with the Injunction, but Tim Cook ignored Schiller and instead allowed Chief Financial Officer Luca Maestri and his finance team to convince him otherwise. Cook chose poorly.

The Wednesday order by Judge Gonzalez Rogers undoes essentially every triumph Apple had in the 2021 case, which ended early last year after the Supreme Court said it wouldn’t hear Epic’s appeal. The judge sided with Apple on practically every issue Epic sued over and only ordered the company to make one change: to allow external payment processors in the App Store. Apple begrudgingly applied in the most argumentative way possible: by charging a 27 percent fee on transactions made outside the App Store and forcing developers who used the program to report their sales to Apple every month to ensure they were following the rules. Epic didn’t like that — because it’s purely nonsensical — so it took Apple back to court, alleging it violated the court order. Judge Gonzalez Rogers agrees.

The judge’s initial order allowed Apple to keep Epic off the App Store by revoking its developer license and even forced Epic to pay Apple millions of dollars in legal fees because she ruled Epic’s lawsuit was virtually meritless. That case was a win for Apple and only required that it extend its reader app exemption — which allows certain apps to use external payment processors without any fees — to all apps, including games. The court found that Apple only providing that exemption to reader apps is anticompetitive and forced Apple to open it up to everyone, which it didn’t. It’s a frustrating own-goal self-inflicted by Apple and nobody else.

For the record, I still think Apple shouldn’t legally be compelled to allow external payment processors, but I also think they ought to do it, as it’s a small concession for major control over the App Store. Forcing developers to use Apple’s in-house payment processing system, In-App Purchase, is called “anti-steering,” and both the European Union and the United States have litigated it extensively. The optics of it are terrible: There’s sound business reasoning that Apple should be able to charge 15 to 30 percent per sale when developers use IAP, but if a developer doesn’t want to pay the commission, it should be able to circumvent it by using an external payment processor moderated by Apple. I really do understand both sides of the coin here — Apple thinks external payment processors are unsafe while developers yearn for more control — but I ultimately still think Apple should let this slide.

I’m not saying Apple shouldn’t regulate external processors in App Store apps. It should, but carefully. Many pundits, including Sweeney himself, have derided Apple’s warnings when linking to an external website as “scare screens,” but I think they’re perfectly acceptable. It’s Apple’s platform, and I think it should be able to govern it as it wants to protect its users. There are many cases of people not understanding or knowing what they’re buying on the web, and IAP drastically decreases accidental purchases in iOS apps. But it should be a choice for every developer to make whether or not they use IAP and give 30 percent to Apple or make more money while running the risk of irritating users. The bottom line is that Apple can still continue to exert control over how those payment processors work and how they’re linked to just by giving up the small financial kickback.

Apple last year got to make a choice: It could either cede control over payment processors and continue the rent-seeking behavior, or it could keep the rent and lose control. It chose the latter option, and on Wednesday, it lost its control. What a terrible own-goal. It lost the legal fight, lost its control, lost its rent, and now has to let its archenemy back on its platform. This is false; read the update for more on this. This is the result of years of pettiness, and while I could quibble about Judge Gonzalez Rogers’ ruling and how it might be too harsh — I don’t think it is — I won’t because Apple’s defiance is petulant and embarrassing.

Update, May 1, 2025: I’m ashamed I didn’t realize this when I wrote this post on Wednesday, but Apple is under no obligation to let Epic or Fortnite back on the App Store. John Gruber pointed this oversight out on Daring Fireball:

None of this, as far as I can see, has anything to do with Epic Games or Fortnite at all, other than that it was Epic who initiated the case. Give them credit for that. But I don’t see how this ruling gets Fortnite back in the App Store. I think Sweeney is just blustering — he wants Fortnite back in the App Store and thinks by just asserting it, he can force Apple’s hand at a moment when they’re wrong-footed by a scathing federal court judgment against them.

Sweeney is a cunning borderline criminal mastermind, and I’m embarrassed I didn’t catch this earlier. Of course he’s blustering — the ruling says nothing about Epic at all, only that Apple violated the court’s first order in 2021. I read most of the ruling Wednesday night as it came out, but seemingly overlooked this massive detail and took Sweeney at his word after I read his post on X. I shouldn’t have done that. Apple is still under no obligation to bring Epic back on the store, it hasn’t said anything about reinstating Epic’s developer license in its statement after the ruling, and Sweeney’s “We’re bringing Fortnite back this week” statement is a fantastical (and apparently successful) attempt to get in the news again and offer Apple a “peace deal.”

I think it’s also a failure on journalists’ part not to report this blatant mockery of the legal system. Yes, Apple was admonished severely by the court on Wednesday, absorbing a major hit to its reputation, but that shouldn’t distract from the fact that Sweeney is a liar and always has been. His own company got caught flat-footed by the Federal Trade Commission years ago for tricking people into buying in-game currency. Sweeney’s words shouldn’t be taken at face value, especially when he’s got nothing to prove his far-fetched idea that “Fortnite” somehow should be able to return to the App Store “next week.” Seriously, this post is so brazen, it makes me want to bleach my eyes:

We will return Fortnite to the US iOS App Store next week.

Epic puts forth a peace proposal: If Apple extends the court’s friction-free, Apple-tax-free framework worldwide, we’ll return Fortnite to the App Store worldwide and drop current and future litigation on the topic.

I can’t believe I fell for this. I can’t believe any journalist fell for this.