An app developer’s lawsuit over App Store rejections, scams and fraud ended in a settlement agreement after court documents revealed that dismissal of the lawsuit had been sought earlier this summer. Plaintiff, app developer and former Pinterest engineer Kosta Eleftheriou has made a name for herself in recent months and highlighted some of the most egregious App Store scams.
He later filed a lawsuit against Apple in March 2021 in the Superior Court of California, Santa Clara County, alleging that his app was unfairly rejected from the App Store and later targeted by scammers, which in turn resulted in lost revenue.
The case had been a high-profile example of developer dissatisfaction with Apple’s App Store business. Many developers were unhappy not only with the requirement to pay Apple a commission on their own sales – something Epic Games is currently suing over – but also with how the App Store model itself incentivizes scammers to take advantage of legitimate developers’ work. But few people have taken these matters to court as Eleftheriou has.
His complaint alleges that Apple’s App Store not only shut out his FlickType Apple Watch keyboard app but also approved the release of rival keyboard apps and other apps that use an integrated version of the FlickType keyboard in the App Store. This seems to contradict Apple’s claim that the FlickType keyboard provides a poor user experience, as Apple’s own app review team gave the same technology a green light when integrating it into other apps such as Reddit’s Nano, Twitter’s Chirp, WhatsApp’s WatchChat and Instagram’s Lens green light.
In addition, when the keyboard app was allowed back into the App Store, its early success made it a target for App Store scammers who launched less usable competitors driven by fake ratings and reviews.
As a result, FlickType’s revenue dropped from $130,000 in its first month to just $20,000 as consumers opted for supposedly better-rated alternatives.
Court records show that the parties participated in calls with the judge after the case was filed last year, including as recently as this spring. A motion to dismiss the lawsuit was then filed on July 21, 2022, after Apple and Kpaw (Eleftheriou’s business) reached an agreement.
Eleftheriou was unavailable to comment on the terms of the settlement. Apple was also unavailable for immediate comment on the dismissal.
Since the developer has been critical of Apple’s App Store business and the difficulties developers face, it’s hard to imagine the developer would agree to dismiss the case – at least to some extent.
Last year, Eleftheriou served as a source for news stories about App Store scams, like a cryptocurrency wallet app that ripped off a user’s life savings ($600,000), a children’s game that included a hidden online casino, a VPN app that ripped off $5 million a year, and more. His findings were also brought up during a Senate antitrust hearing in April 2021, when Apple’s Chief Compliance Officer Kyle Andeer cited the work of Eleftheriou, who offered questions about why Apple could not locate such scams on its own – since they are so easy to identify.
Most recently, the U.S. FTC highlighted fake App Store reviews in a lawsuit filed this week as part of a larger action against rental platform Roomster – suggesting that if Apple doesn’t act then it will.
While App Store reviews remain an issue, Apple has made some concessions to developer demands in the time since Eleftheriou filed its lawsuit.
Last fall, Apple reinstated the “Report a Problem” button on the App Store, which invites the public to help it fight fraudulent apps. In addition, it updated its App Store Guidelines last June to combat fraud and scams by promising to remove scammers from Apple’s developer program.
Since app developers are often left to post on Twitter or contact the media to get their complaints answered when scammers affect their business and revenue, there is now but still more work to be done. This was recently the case with Kevin Archer, developer of the Authenticator app, who took to Twitter to detail how he continues to confront subscription scammers on the App Store who copy his legitimate app then beg for reviews when it goes live and pushes subscriptions to consumers when it first launches.
While settling small lawsuits like Eleftheriou’s may be routine for a company Apple’s size, the attention they receive – not only among developers but also among the broader Apple consumer base – may not be something Apple wants to deal with at the moment. The company is particularly interested in avoiding negative public perceptions of its business in the early stages of the U.S. Justice Department’s antitrust suit against Apple.
As for Eleftheriou, he hasn’t given up on the app despite the problems.
The developer says he is now working on a project related to the iPhone keyboard but has no further details to share at this time. Notably, his revised complaint mentions the difficulty of building keyboard applications, as Apple has never provided a developer API to request full access directly from the keyboard. In addition, he argues that Apple limits third-party keyboards in terms of available memory, the ability to collect data for better predictions, the ability to use it for password fields and limitations on displaying visual elements above the keyboard.
Eleftheriou cannot yet say what, if anything, has changed in this area that his new app may be able to address.
For now, he’s also still keeping an eye on scams. Eleftherios uses a software tool he built to identify App Store subscription scams and fraud, and he realizes there’s still a lot of work to be done. “Just the other day I reran my scam search tool and found several new scam apps within five minutes, which clearly has implications for both users and developers,” he said.
