Apple Inc. v. Epic Games, Inc.

Apple created the iPhone, iOS, and the App Store—a two-sided marketplace connecting millions of app developers with consumers worldwide. To compensate Apple for its platform, Apple charges developers a commission of 15–30% on digital goods purchased through its In-App Purchase (IAP) system. Apple also maintained anti-steering provisions that blocked developers from directing users to cheaper purchasing options outside the App Store. Epic Games, one of the world’s largest mobile game developers and distributor of its own competing app marketplace, challenged these rules. In 2020, Epic filed suit alleging Apple's anti-steering provisions violated California’s Unfair Competition Law (UCL) by preventing consumers from learning about lower-priced alternatives. After a bench trial, the district court agreed on the UCL claim and issued a 75-word permanent injunction barring Apple from prohibiting developers from including buttons, external links, or other calls to action directing users to alternative purchasing mechanisms. The injunction said nothing about commissions.

After the Supreme Court declined to hear Apple’s appeal in January 2024, Apple implemented what it called a compliance program. Rather than simply allowing unfettered link-outs, Apple imposed a 27% commission on all external link-out purchases—a rate Apple’s own internal analysis showed would make link-outs economically unviable for virtually every developer—and paired that commission with a set of restrictions designed to maximize user friction: invisible “plain button” styles, five rigid link templates, a full-screen “scare screen” warning users they were leaving the App Store, static URLs that required users to manually log in, and a ban on placing external links anywhere near the purchase flow. Internal documents revealed Apple deliberately modeled the precise amount of friction needed to ensure developers would abandon link-outs entirely, and that Apple chose the most anticompetitive options available at every decision point. Epic moved to enforce the injunction through a civil contempt proceeding, arguing Apple had violated the injunction's goals even though the injunction’s text never addressed commissions.

After multi-day evidentiary hearings, the district court held Apple in civil contempt, finding Apple had violated the “spirit” of the injunction by imposing a prohibitive commission and friction-inducing restrictions. Apple appealed, and the U.S. Court of Appeals for the Ninth Circuit affirmed the contempt finding, holding under circuit precedent that “parties may be held in contempt for violating the spirit of an injunction” even where the injunction’s text does not address the conduct at issue; the Ninth Circuit denied rehearing en banc.