App Developer Sues Apple Over Lost Revenue Due to App Store Scams

An app developer is suing Apple, claiming the tech giant knowingly allows scam apps to remain on the iOS App Store so that it can get that 30% cut of the millions of dollars these apps make. 😑

Kosta Eleftheriou, co-founder of the Fleksy keyboard app, has been calling out the App Store for problems like fake ratings, reviews, and subscription scams for months now. He has also been vocal about malicious app clones after his app, FlickType, was targeted by scammers.

Eleftheriou has taken the next step in his crusade against Apple: he has filed a lawsuit against the tech titan in California.

Holding Apple Accountable

The lawsuit, filed in Santa Clara County on Wednesday, accuses Apple of false advertising, breach of good faith, negligence, negligent misrepresentation, and unfair competition. It claims that Apple lures developers to publish their apps on the App Store, assuring them the platform is safe and trustworthy. However, the App Store allegedly doesn’t protect legitimate app developers from scammers profiting 💰 off their hard work.

“Apple entices software application developers like Plaintiff to develop innovative applications with the promise of a fair and secure App Store in which to sell them,” the court filing states. “In truth, Apple systematically flexes its monopoly muscle against potential competition through the App Store and profits from rampant fraudulent practices.”

The suit further claims Apple isn’t incentivized to do anything about the scammers. This is because the fake apps generate revenue for the company via subscriptions. Apple gets a cut from subscription revenue regardless of whether it comes from a legitimate app or a clone.

Eleftheriou claims he has personally been impacted by scammers. He developed FlickType, a swipe keyboard app for the Apple Watch. Like any popular app, FlickType was targeted by copycat app makers, who claim their apps offer the same features but instead lock users into expensive subscriptions for their poorly designed software. These scammers also flood their apps with fake reviews and ratings ⭐ to make them appear to be a much better option than the original app.

Meanwhile, FlickType sports a 3.5-star rating, as it’s often panned for issues outside Eleftheriou’s control. While Eleftheriou engages with his users when they leave bad reviews, scammers copying his app simply buy enough 5-star reviews to keep their apps’ overall ratings higher.

The suit argues that Eleftheriou is doing the hard work of being an app developer carving out a niche for Apple Watch swipe keyboards. However, his potential income is siphoned by scam apps with a fake presence on the App Store.

Does Apple Deliberately Profit from App Store Scams?

Eleftheriou’s lawsuit claims Apple does very little to police scammers’ apps 📱 because it profits from their misconduct. The App Store grossed more than $64 billion last year, and Apple gets a 30% cut from all digital sales on the platform.

His story is not unique; he has documented the App Store’s multi-million-dollar scams for several months. In some cases, Apple would take action against the scammers he highlighted on social media. Sometimes it would take down one of the developer’s scam apps, but allow others under the same developer account to continue to operate.

The goal of this lawsuit is to hold Apple accountable for issues Eleftheriou faced. He is asking Apple to restore his lost revenue and pay any other damages awarded by the court.

Apple has previously attempted to tackle issues of poor app quality and scams. It performs regular sweeps to clean up shady subscription apps and remove clones/spam from the App Store, which includes apps that are outdated, abandoned, or don’t function as advertised.

The company once even went so far as to ban apps created by templates or app generation services to raise the bar on app quality. That policy change angered 😡 small businesses that don’t have the resources or funds to design custom apps from scratch. Apple later revised the ban on template-based apps to make its guidelines more equitable.

Breaking Up Tech Monopolies

Criticism about the monopolistic practices of tech companies like Apple, Google, and Facebook is nothing new. But it’s still pretty crazy that Apple and Google together command 100% of the market for smartphone operating systems.

All apps iPhone users download must come from the iOS App Store. The same goes for Google, which gives preference to apps downloaded on the Google Play Store. Both companies retain as much as 30% of the money consumers pay for purchases on their respective app stores. 💵

Several states have recently ramped up their effort to break up these monopolies and promote fairness in digital commerce. For example, Arizona recently passed a bill that prevents digital platforms from compelling consumers and software developers from using those platforms’ payment systems.

Congress also recently geared up to take on digital platforms using antitrust laws. Lawmakers from both sides of the partisan aisle think antitrust might be a solution to consumer concerns like privacy violations and the spread of disinformation.