Oct 21 (Reuters) - Apple ( AAPL ) urged a U.S. appeals court on

Tuesday to reverse a federal judge's order that bars it from

collecting commissions on some app purchases and asked it to

overturn a contempt finding against the iPhone maker for

violating a prior court decision in the case.

Attorney Gregory Garre of Latham & Watkins, arguing for

Apple ( AAPL ) before the San Francisco-based 9th U.S. Circuit Court of

Appeals, said a district judge had improperly expanded

restrictions on Apple's ( AAPL ) App Store that she had imposed earlier

in the lawsuit brought by "Fortnite" video game maker Epic

Games.

U.S. District Judge Yvonne Gonzalez Rogers in 2021 said

Apple ( AAPL ) must allow developers to more easily steer consumers to

potentially cheaper non-Apple ( AAPL ) payment options.

After Epic complained that Apple ( AAPL ) had not fully complied,

Gonzalez Rogers ruled in April that the company violated her

order. She imposed a new injunction that barred the company from

imposing commissions tied to off-app purchases.

"Apple ( AAPL ) is entitled to at least some compensation for

developers' access to its unparalleled parallel innovations and

its vast user base," Garre told Circuit Judges Sidney Thomas and

Milan Smith, who heard the case with Oregon Chief U.S. District

Judge Michael McShane.

Garre told the court that Apple ( AAPL ) was "prepared to come

forward with an appropriate commission and justify it."

Smith at the hearing expressed concern about the breadth of

the lower court's April ruling. "That's quite a penalty. We're

talking billions of dollars," Smith said of the injuction

barring commissions.

Gonzalez Rogers in her order referred Apple ( AAPL ) and one of

its executives to federal prosecutors for a possible criminal

contempt investigation, after finding Apple ( AAPL ) had misled the court

in defiance of the court's earlier injunction.

Apple ( AAPL ) has denied any wrongdoing, and defended its compliance

with the court's orders.

Epic Games sued Apple ( AAPL ) in 2020 to loosen its control over

transactions in applications that use its iOS operating system

and its restrictions on how apps were distributed to consumers.

Apple ( AAPL ) mostly won the lawsuit, but was required in Gonzalez

Rogers' 2021 injunction to allow developers to include links in

their apps directing users to alternative purchasing methods.

Apple ( AAPL ) removed the old restrictions but added new ones,

including imposing a 27% commission on developers for purchases

made outside the App Store within seven days of clicking a link.

Apple ( AAPL ) charges developers a 30% commission fee for purchases

within the App Store.

Apple's ( AAPL ) new commission and design rules were crafted to

block developers from steering users to cheaper payment options

outside the app, in violation of the original order, Epic told

the appeals court.

Epic's lawyer Gary Bornstein of Cravath, Swaine & Moore said

at the hearing that Apple ( AAPL ) should not be allowed to get a second

chance to argue for a commission rate after having allegedly

misled the court.

"That's not how injunction compliance operates," Bornstein

said.

The appeals court could rule later this year or early next

year. Either side can ask the U.S. Supreme Court to review the

decision.

The case is Epic Games Inc v. Apple Inc ( AAPL ), 9th U.S. Circuit

Court of Appeals, No. 25-2935.

For Epic: Gary Bornstein of Cravath, Swaine & Moore

For Apple ( AAPL ): Gregory Garre of Latham & Watkins