Epic was "not honest" when it bypassed Apple's payment system for "Fortnite," judge says.

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Epic was "not honest" when it bypassed Apple's payment system for "Fortnite," judge says.

The legal dispute between Epic Games and Apple took another step forward yesterday with the hearing of Epic's request for an injunction against Apple's decision to remove Fortnite from the iOS App Store. There was no ruling on the claim, but it was not a particularly good day for Epic: as CNN reported, Judge Yvonne Gonzalez Rogers criticized Epic's actions leading up to the lawsuit, allowing it to circumvent Apple's payment system said the company "was not being honest" when it released the Fortnite update.

The judge seemed to suggest that Epic's actions actually help justify Apple's defense of its App Store policy as a way to protect users from malicious software. He said, "You did something and lied about it by omission, i.e., by not being forthright about it. That's a security issue. That is a security issue!" She said. 'There are many people in the world who see what you did as heroic, but still not honest.'

The judge also found "not particularly persuasive" Epic's argument that forcing developers to use Apple's in-app billing system amounted to an illegal "tying sale" that requires customers who want to buy a particular product to also buy other products.

The FTC's website states that "a monopolist may use forced purchases, or 'tying sales,' to obtain sales in other markets where it is not dominant and to make it more difficult for rivals in those markets to obtain sales," and the restrictions against illegal tying sales While the restrictions on tying sales are clearly being relaxed (and of course they are), it states that "these arrangements may violate antitrust laws if the seller offering the tying product has sufficient market dominance in the 'tying' product."

Judge Gonzalez Rogers did not view in-app payments as a "separate and distinct product" and stated that if her opinion stands in the final ruling, the system would be exempt from antitrust regulation. She also rejected Epic's claim that it suffered damages from the removal of Fortnite from the App Store.

"Walled gardens have existed for decades. Nintendo had a walled garden. Sony had a walled garden. Microsoft had a walled garden. What Apple is doing is much the same. ...... It is hard to ignore the economics of the industry.

CNN reporter Brian Fung was blunt in his assessment as the hearing unfolded.

Apple, meanwhile, described Epic CEO Tim Sweeney as "the pied piper of other developers" and said he wants "cheating, breach of contract, and software creep to get around app reviews."

It's not a loss for Epic, but it's not a rolling start either; whatever the decision on Epic's injunction request will be, the judge did not give a deadline for when the injunction will be granted, and there is no indication of a rush to a decision. She also said she would prefer that the actual case be tried before a jury and warned that because of her schedule, the case likely will not go to trial until July 2021.

We have asked Epic for comment and will update if we receive a response.

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