Apple chief executive Tim Cook has long argued it needs to control app distribution on iPhones, otherwise the App Store would turn into “a flea market.”
But among the 1.8 million apps on the App Store, scams are hiding in plain sight. Customers for several VPN apps, which allegedly protect users’ data, complained in Apple App Store reviews that the apps told users their devices have been infected by a virus to dupe them into downloading and paying for software they don’t need. A QR code reader app that remains on the store tricks customers into paying $4.99 a week for a service that is now included in the camera app of the iPhone. Some apps fraudulently present themselves as being from major brands such as Amazon and Samsung.
Of the highest 1,000 grossing apps on the App Store, nearly two percent are scams, according to an analysis by The Washington Post. And those apps have bilked consumers out of an estimated $48 million during the time they’ve been on the App Store, according to market research firm Appfigures. The scale of the problem has never before been reported. What’s more, Apple profits from these apps because it takes a cut of up to a 30 percent of all revenue generated through the App Store. Even more common, according to The Post’s analysis, are “fleeceware” apps that use inauthentic customer reviews to move up in the App Store rankings and give apps a sense of legitimacy to convince customers to pay higher prices for a service usually offered elsewhere with higher legitimate customer reviews.
Two-thirds of the 18 apps The Post flagged to Apple were removed from the App Store.
Apple has long maintained that its exclusive control of the App Store is essential to protecting customers, and it only lets the best apps on its system. But Apple’s monopoly over how consumers access apps on iPhones can actually create an environment that gives customers a false sense of safety, according to experts. Because Apple doesn’t face any major competition and so many consumers are locked into using the App Store on iPhones, there’s little incentive for Apple to spend money on improving it, experts say.
Apple unwittingly may be aiding the most sophisticated scammers by eliminating so many of the less competent ones during its app review process, said Miles, who co-authored a paper called “The Economics of Scams.”
Apple has argued that it is the only company with the resources and know-how to police the App Store. In the trial that Epic Games, the maker of the popular video game “Fortnite,” brought against Apple last month for alleged abuse of its monopoly power, Apple’s central defense was that competition would loosen protections against unwanted apps that pose security risks to customers. The federal judge in the case said she may issue a verdict by August.
The prevalence of scams on Apple’s App Store played a key role at trial. Apple’s lawyers were so focused on the company’s role in making the App Store safe that Epic’s attorneys accused them of trying to scare the court into a ruling in favor of Apple. In other internal emails unearthed during trial that date as far back as 2013, Apple’s Phil Schiller, who runs the App Store, expressed dismay when fraudulent apps made it past App Store review.
After a rip-off version of the Temple Run video game became the top-rated app, according to Schiller’s email exchange, he sent an irate message to two other Apple executives responsible for the store. “Remember our talking about finding bad apps with low ratings? Remember our talk about becoming the ‘Nordstroms’ of stores in quality of service? How does an obvious rip off of the super popular Temple Run, with no screenshots, garbage marketing text, and almost all 1-star ratings become the #1 free app on the store?” Schiller asked his team. “Is no one reviewing these apps? Is no one minding the store?” Apple declined to make Schiller available to comment. At trial, Schiller defended the safety of the app store on the stand. The app review process is “the best way we could come up with … to make it safe and fair.”
Eric Friedman, head of Apple’s Fraud Engineering Algorithms and Risk unit, or FEAR, said that Apple’s screening process is “more like the pretty lady who greets you with a lei at the Hawaiian airport than the drug sniffing dog,” according to a 2016 internal email uncovered during the Epic Games trial. Apple employs a 500-person App Review team, which sifts through submissions from developers. “App Review is bringing a plastic butter knife to a gun fight,” Friedman wrote in another email.
Though the App Store ratings section is filled with customer complaints referring to apps as scams, there is no way for Apple customers to report this to Apple, other than reaching out to a regular Apple customer service representative. Apple used to have a button, just under the ratings and reviews section in the App Store, that said “report a problem,” which allowed users to report inappropriate apps. Based on discussions among Apple customers on Apple’s own website, the feature was removed some time around 2016.