Tech Brew Ride Home - Thu. 05/01 – Judge Refers Apple For A Criminal Investigation

Episode Date: May 1, 2025

Apple basically got held in contempt of court in the Epic case. Rumors about Elon staying at Tesla. Meta and Microsoft earnings. Xbox price increases. Would you wear a smart ring that proves you’re not cheating on your significant other? Links: Apple Dealt Stinging Court Defeat on App Store Sales Commissions (Bloomberg) Tesla Board Opened Search for a CEO to Succeed Elon Musk (WSJ) Microsoft is raising prices on Xbox consoles, controllers, and games worldwide (The Verge) Meta tightens privacy policy around Ray-Ban glasses to boost AI training (The Verge) Would you wear a smart ring that proves you’re not a cheater? (The Verge) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Tech meme right home for Thursday, May Day 2025. I'm Brian McCullough today. Apple basically got held in contempt of court in the epic case. Rumors about Elon staying at Tesla, meta and Microsoft earnings, Xbox price increases. And would you wear a smart ring that proves you're not cheating on your significant other? Here's what you miss today in the world of tech.

Whoa. A U.S. judge has ruled that Apple violated a 2021 court order to open. the app store to third-party payment options and has referred the case for a criminal investigation. You heard that right. Quoting Bloomberg, U.S. District Judge Yvonne Gonzalez-Rogers cited Wednesday with Fortnite developer Epic Games over its allegation that the iPhone maker failed to comply with an order she issued in 2021 after finding the company engaged in anti-competitive 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. The U.S. Attorney's Office in San Francisco declined to comment. The changes the company must now make could put a sizable dent in the double-digit billions of dollars in revenue the App Store generates each year. Apple is potentially facing another multi-billion dollar hit from losing payments Google makes to be the default search engine for its Safari browser, which is the subject of an ongoing Justice Department antitrust case against the alphabet unit. After several weeks of hearings last year and this, Gonzalez-Rodgers concluded Wednesday that Apple, quote, willfully violated her injunction, quote, it did so with the express intent to create new anti-competitive barriers, which would,

by design, and in effect, maintain a valued revenue stream. A revenue stream previously found to be anti-competitive, she wrote in her 80-page ruling, that it thought this court would tolerate such insubordination was a gross miscalculation, end quote. Epic Games chief executive officer Tim Sweeney called the ruling a huge victory for developers, saying in a phone call with journalists, it forces Apple to compete with other payment services rather than blocking them, end quote. Actually, quoting Tim Sweeney on X, we will return Fortnite to the U.S. iOS App Store next week. And 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 top.

end quote. We'll see if anything comes of that. Apple, of course, says it disagrees with the court's injunction and plans to appeal, but will comply with the order in the meantime. Meanwhile, CNBC was reporting that Apple's Phil Schiller wanted Apple to comply with the court order, but Tim Cook ignored him. And this, quote, Apple vice president of finance Alex Roman, quote, outright lied to the court about when Apple had decided to levy a 27% fee on some purchases linked to its app store. neither Apple nor its counsel corrected the now obvious lies, Judge Gonzalez-Rogers wrote, saying that she considers Apple to, quote, have adopted the lies and misrepresentations to this court. The decision is a striking repudiation of Apple's conduct in the Epic Games trial,

which was decided in 2021 and appealed in 2023. While Apple won the vast majority of counts in the original trial, Epic Games did win some concessions tucked inside a 180-page order. Rogers originally ordered the company to make changes to its app store, allowing software developers to link to their websites inside of iPhone apps for customers to make purchases outside of Apple's ecosystem. On Wednesday, Rogers accused Apple of willfully trying to violate her ruling, and she held the company in contempt.

Rogers wrote that it was expected under her ruling that those kinds of off-app purchases would not have an Apple commission. But Apple introduced new policies in 2020. 24 that collected a 27% commission from some of those purchases, only a slight discount from the 30% Apple usually collects from in-app purchases. Rogers said nearly every Apple decision on its app linking policies was anti-competitive. Rogers wrote that Apple presented evidence to the court of internal deliberations about its rule that were, quote, Taylor made for litigation instead of the company's actual internal discussions. Quote, in stark contrast to Apple's

initial in-court testimony, contemporaneous business documents reveal that that Apple knew exactly what it was doing and at every turn chose the most anti-competitive option, Rogers wrote. To hide the truth, Vice President of Finance Alex Roman outright lied under oath, end quote. Rogers also accuses Apple of withholding documentation of a June 2020 meeting, including CEO Tim Cook, about how they would comply with the 2021 court order. Rogers said that Apple hid the existence of the meeting from the court until 2025. She also said that Apple abused privilege in order not to share documents that it was supposed to. Apple had a, quote, desire to conceal Apple's real decision-making process, particularly where those decisions involve senior Apple executives, Rogers wrote. Former Apple senior vice president

and current fellow Phil Schiller did not want Apple to take a commission on web links, but Cook ignored him, Rogers said. Cook chose poorly, Rogers wrote. The judge ordered effective immediately for Apple to stop imposing its commissions on purchases made for iPhone apps through web links inside an app. She also ordered Apple to pay Epic Games's attorney's fees over this specific issue. This is an injunction, not a negotiation. There are no do-overs once a party willfully disregards a court order, Rogers wrote, end quote. Meanwhile, you might have heard about this, quoting the journal, about a month ago with Tesla's stock sinking, and some investors irritated about Elon Musk's White House focus, Tesla's board got serious about looking for Musk's successor.

board members reached out to several executive search firms to work on a formal process for finding Tesla's next chief executive, according to people familiar with the discussions. Tensions had been mounting at the company, sales and profits were deteriorating rapidly. Musk was spending much of his time in Washington. Around that time, Tesla's board met with Musk for an update. Board members told him he needed to spend more time on Tesla, according to people familiar with the meeting, and he needed to say so publicly. Musk didn't push back. Tesla has been on a losing streak in the month since Musk, its visionary chief executive began spending much of his time helping President Trump's slash federal spending. Last week after the company said its first quarter profit had plunged 71 percent, Musk told investors he would soon pivot back to his job at Tesla.

Starting next month, he said on a conference call about earnings, I'll be allocating far more of my time to Tesla. The board narrowed its focus to a major search firm, according to people familiar with the discussions. the current status of the succession planning couldn't be determined. It is also unclear if Musk, himself a Tesla board member, was aware of the effort, or if his pledge to spend more time at Tesla has affected succession planning. Musk didn't respond to requests for comment. Tesla didn't provide a statement before publication. Hours after this article was published, Tesla issued a denial on X. Musk also criticized the article in a post on X. The CEO of Tesla is Elon Musk, and the board is highly confident in his ability to continue executing on the exciting

growth plan ahead, Tesla chair, Robin Denham said in a statement posted on X. Early last year, after some two decades of running Tesla, Musk confided to someone close to him in late-night texts, that he was frustrated to still be working nonstop at the company, especially after a Delaware judge had struck down his multi-billion dollar pay package. Last spring, he told that person that he no longer wanted to be CEO of Tesla, but that he was worried that no one could replace him atop the company and sell the vision that Tesla isn't an automaker, but the future of robotics and automation as well. Musk has complained both in public and private that despite owning roughly 13% of the company,

he has been working without pay for the last seven years. The Tesla board recently formed a special compensation committee to address CEO compensation. Some Tesla employees said that the first time they had heard from Musk in months was at an all-hands meeting in March, streamed to all ex-users, where he tried to reassure employees and persuade them not to sell their shares. If you read the news, it feels like Armageddon, he told them, I can't walk past the TV without seeing a Tesla on fire, he said, referring to vandalism at Tesla showrooms and charging stations. There are times when there are rocky moments, a little bit of stormy weather, but I'm here to tell you that the future is bright and exciting. What I'm saying is,

hang on to your stock, end quote. META reported Q1 revenue up 16% year-on-year and family daily active people up 6% to 3.4 billion on average for March of 2025, yada, yada. More interesting was that Mark Zuckerberg said that WhatsApp now has more than 3 billion monthly active users up from 2 billion in February 2020 and 1.5 billion in January 2018. Also, meta increased its 2025 CAPEX to a range of $64 to $72 billion due in part to higher infrastructure costs up from its prior outlook of $60 to $65 billion. $1. Meta's stock jumped 5% on the news, so I guess Wall Street is cool with all of that spending continuing. Microsoft Q3 revenue was up 13% year-on-year to $71.1 billion versus $68.42 billion

estimated. Microsoft 365 commercial products and cloud services up 11% and Q4 revenue forecasts were above estimates. The all-important Azure and other cloud services revenue was up 33% above estimates, and Microsoft said, GitHub co-pilot has more than 15 million users up 4X year-on-year. GitHub CEO Thomas Domke said its code review agent launched in April has handled more than 8 million pool requests. This morning, Microsoft raised the prices of its Xbox Series S and X consoles, Xbox controllers, and some new Xbox games globally. The Xbox Series S is up $80 to $300.

$180, quoting the verge. The Xbox Series X is getting bumped by $100 to $599. Microsoft is also planning to adjust the pricing of some of its new first-party Xbox games this holiday season up to $799. Xbox wireless controllers and headsets are also having their recommended retail pricing adjusted in the U.S. With the base controller moving to $6499 and the Xbox wireless headset now at $11999. You can already find both of these accessories at this type of pricing, right now. Microsoft last hiked the price of its Xbox Series X console in June 2023 as part of price increases that also impacted Xbox Game Pass. The subscription service also saw a price increase last year alongside the launch of a new standard tier. The price rises come amid uncertainty over the

Trump tariffs and just a day after Microsoft's CEO Sachin Adela revealed that Microsoft quote ended the quarter as the top publisher by pre-orders and pre-installs on both Xbox and PlayStation Store during the company's Q3 fiscal earnings call. Microsoft also also saw PC GamePass revenue increased by 45% year over year, end quote. And Meta updated the Ray Ban Meta Smart Glass's privacy policy on April 29th to enable the Hey Meta voice command by default. Cool, right? Downside is they will also be storing voice recordings for a year. So you know how you always have that thought in the back of your mind that maybe somehow Meta is listening in on what you're saying to target you with ads?

Now that might actually be true, question mark? Quoting the Verge, meta is making a few notable adjustments to the privacy policy for its RayBan meta smart glasses in an email sent out on April 29th to owners of the glasses the company outlined two key changes. First, meta AI with camera use is always enabled on your glasses unless you turn off Hey Meta. The email said, the latter refers to the hands-free voice command functionality. That said, spokesperson Albert Eiden tells the Verge, the photos and videos captured on Rayban Meta are on your phone's camera roll and not used by Meta. for training, including photos or videos captured by using the Hey Meta, take a photo slash video voice command. If you share those photos to a product, for example, meta AI, cloud services, or a third-party product, then the policies of that product will apply. Second, meta is taking after Amazon by no longer allowing Rayban meta owners to opt out of having their voice recordings stored in the cloud. The option to disable voice recordings storage is no longer available, but you can delete recordings any time in settings, the company wrote. In its voice privacy notice, Meta states that voice transcripts

and stored audio recordings are otherwise stored for up to one year to help improve Meta's products. If the company detects that a voice interaction was accidental, those recordings are deleted after a shorter 90-day window. The motivation behind these changes is clear. Meta wants to continue providing its AI models with heaps of data on which to train and improve subsequent results. Some users began noticing these policy changes in March, but at least in the United States, says they went into effect as of April 29th. Earlier this month, the company rolled out a live translation feature to the Rayban meta product, and just yesterday, Meta rolled out a standalone meta-AI app on smartphones to more directly compete with OpenAIs chat GPT, Google Gemini, Anthropics

Claude, and other AI chatbots. The company is reportedly planning a higher-end pair of Rayban meta-glasses for release later in 2025, end quote. Finally today, from The Verge, this headline kind of says it all. Would you wear a smart ring that proves you're not a cheater? Quote, imagine this. You wake up, roll over, take your smart ring off its charger, and slip it onto your finger. After eating breakfast and getting ready for work, you kiss your lover goodbye and head out. Everything's hunky-dory until you look down at your finger.

The LED light on your smart ring is flashing pink. It means something's up with your lover, probably with an elevated heart rate. You pull out your phone, open an app, and read detailed AI-generated insights that indicate your lover is, aroused? You furrow your brow because you're not at home. Something is up. What I've written is, as of right now, science fiction. However, if the raw ring sees the light of day, this could become a real product you can buy, at least in theory. You may have seen some coverage of the raw ring in the past few weeks. The smart ring has been described as a dystopian loyalty tracker that can help you catch a cheating partner in the act. It's not a product that actually exists yet,

but the idea was developed by the folks behind Raw, a dating app that aims to cut down on catfishing and ghosting by making its users upload unfiltered real-time dual camera selfies. The Raw Ring, CEO Marina Anderson, says, is meant to be an extension of that app. For what it's worth, App Store reviews say the dating app is also a work in progress. The idea behind the ring was to give couples more ways to explore each other's feelings on a deeper level and build more trust, says Anderson, noting that Raw chose a ring because it's been a cultural symbol of trust for thousands of years. Almost 50% of marriages now end in divorce. We would like to build the ring as a symbol of trust again. You can't buy it yet, and it's unclear if and when you can,

but Anderson has a blueprint of how it'll work. The smart ring will have an optical sensor to measure heart rate and heart rate variability, a skin temperature sensor, plus an accelerometer and gyroscope for detecting movement. It will also have a noise-cancelling memm's microphone to analyze voice tone. The ring will utilize a dual-level AI, one that's on device to handle real-time processing of voice and biometric data, and another in the cloud to do, quote, deeper trend analysis. Anderson claims that AI will be able to differentiate between vigorous exercise, arousal, and just regular activity by analyzing multiple data points. Physiological stress, for example, is signaled through metrics like heart rate and temperature,

while emotional anxiety is indicated by shifts in tone or irregular movement. Lastly, Anderson claims there will be a customizable LED light and Chi wireless charging. On paper, this is all feasible. Aspects of the raw ring are in products you can buy now. Smart rings like the ORA ring and many of its new competitors track stress and can automatically detect exercise from other types of movement, though smart rings aren't always the best at differentiating between sexual activity, intentional exercise, and you huffing and puffing up the stairs. B, an AI wearable recorder and the now-defunct Amazon Halo, also used AI to analyze vocal tones. There are gadgets like the Bond Touch bracelet, which allow long-distance partners

to send each other vibrations to show their thinking of each other. Raw Ring is simply proposing to mash together these disparate parts into a single device. But the question with the raw ring isn't whether it's possible to make, it's whether we should, end quote. Nothing more for you today. Talk to you tomorrow. Thank you.