A lawsuit over App Store abuses has been given the green light to proceed, at least on some fronts. The case, filed in California’s Superior Court in Santa Clara County last March, hails from app developer and former Pinterest engineer Kosta Eleftheriou, who claims his keyboard app FlickType was initially unfairly rejected from Apple’s App Store, then later targeted by scammers once approved, leading to lost revenues.
The judge has ruled that at least half the claims can proceed and is giving Eleftheriou the opportunity to amend the remaining items that were dismissed.
Eleftheriou has become known as an outspoken App Store critic in recent months, often serving as the source for stories about App Store scams like a crypto wallet app that scammed a user out of his life savings (~$600,000) in bitcoin; a kids game that actually contained a hidden online casino; and a VPN app scamming users out of $5 million per year, among others. His findings even became the subject of a line of questioning during a Senate antitrust hearing in April 2021, where Georgia’s Senator Jon Ossoff (D-GA) questioned Apple Chief Compliance Officer Kyle Andeer as to why Apple was not able to locate these sorts of scams itself, given they were “trivially easy to identify.”
In his own lawsuit against Apple, Eleftheriou aims to document what he alleges were an unfair series of rejections for his Apple Watch keyboard app, FlickType, from the App Store. At the time, Apple told Eleftheriou his app offered a “poor user experience” and noted full keyboard apps were not allowed for Apple Watch. But, he says, it then allowed competitor keyboard apps as well as third-party apps (like Nano for Reddit, Chirp for Twitter, WatchChat for WhatsApp and Lens for Instagram) to launch on the App Store — the latter using an integratable version of the FlickType keyboard, in seeming contradiction to Apple’s earlier claims over FlickType’s poor usability.
When Apple chose to approve FlickType in January 2020, the keyboard app reached the App Store’s top 10 paid app list and generated $130,000 in revenue during its first month, Eleftheriou said. But this soon made it a target for scammers who launched barely usable competitors boosted by fake ratings and reviews, he claims. As a result, he says FlickType’s revenue dropped to just $20,000 per month as the scammers cut into the potential revenue from users seeking a keyboard app.
According to the original complaint, Eleftheriou is looking to hold Apple accountable for the issues the FlickType app faced with rejections, and is asking Apple to restore lost revenue due to scam apps. He believes Apple at first was preventing competition with its own built-in keyboard and later did little to prevent unscrupulous developers from buying fake reviews to make their apps look better than their legitimate rivals.
In legal terms, Eleftheriou’s case against Apple involves six causes of action, including false advertising, unfair competition, a breach of contract claim (“implied covenant of good faith and fair dealing”), fraud, negligent misrepresentation and negligence. Apple attempted to get the entire case dismissed, citing similar lawsuits that were also dismissed. It also objected to the entire complaint, saying that each cause of action failed to state sufficient facts. But Superior Court Judge Peter H. Kirwan disagreed with this, ruling on each of the six items.
The court overruled Apple’s individual objections on the first three causes of action, which means at least part of the case’s claims will proceed. In addition, the court gave Kpaw, Inc. (Eleftheriou’s company) the opportunity to amend the other three causes of action, which involve the claims of fraud and negligence. Eleftheriou says he plans to amend the complaints to add the specifics the court requires, and “definitely” plans to proceed with the lawsuit, which he says now moving forward with discovery.
Of course, there are much larger lawsuits underway against Apple, like the antitrust suit between Apple and Epic Games — now under appeal. But this particular case is one worth tracking, too, as it doesn’t attempt to make an antitrust argument, necessarily, but instead aims to see if Apple can be legally held accountable for other aspects of how it runs its App Store business — including issues involving inconsistent app rejections that also plague other developers, and the prevalence of scam apps that are being allowed to thrive on the App Store.
A number of lawsuits against Apple from smaller developers have failed over the years, including those involving antitrust claims from BlueMail developer Blix, current exchange app Konverti, health app Coronavirus Reporter and jailbreak app Cydia, among others. By comparison, Kpaw versus Apple doesn’t outright accuse Apple of being a monopoly, but instead focuses on specific App Store issues.
“Apple has been massively profiting from their App Store monopoly, by restricting the ability of developers to freely conduct business directly with their users,” said Eleftheriou. “Their anti-competitive practices have gone unchecked for over a decade, and they’re only getting more brazen. I’m now looking forward to presenting my case, and I’m confident the court will see Apple’s practices for what they are.”
Apple was also asked for comment, but did not yet respond.