An App Store abuse lawsuit has been given the green light to proceed, at least on some fronts. The case, filed in the California Superior Court in Santa Clara County last March, comes from app developer and former Pinterest engineer Kosta Eleftheriou, who claims his FlickType keyboard app was initially unfairly rejected from Apple’s App Store, then targeted by scammers once approved, leading to lost revenue.
The judge has ruled that at least half of the actions can proceed and is giving Eleftheriou the opportunity to amend the remaining items that were dismissed.
Eleftheriou has become known as an outspoken critic of the App Store in recent months, often serving as a source for stories about App Store scams as a crypto wallet app that cheated a user out of their lifetime savings (~$600,000) in bitcoin; a children’s game that really contained a hidden online casino; and a VPN app cheating $5 million users per year, among others. Its findings even became the subject of a line of questioning during a Senate antitrust hearing in April 2021, where Georgia Senator Jon Ossoff (D-GA) questioned Apple Chief Compliance Officer Kyle Andeer about why Apple could not locate these types of scams. themselves, since they were “trivially easy to identify”.
In his own lawsuit against Apple, Eleftheriou intends to document what he claims was an unfair series of rejections for his Apple Watch keyboard app, FlickType, from the App Store. At the time, Apple told Eleftheriou that its app offered a “bad user experience” and noted that full keyboard apps were not allowed for the Apple Watch. But, he says, it has allowed competing 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 embeddable version of the keyboard. FlickType, in apparent contradiction to Apple’s previous claims about FlickType’s poor usability.
When Apple chose to approve FlickType in January 2020, the keyboard app reached the App Store’s Top 10 Paid Apps list and generated $130,000 in revenue during its first month, Eleftheriou said. But that soon made him a target for scammers who pitched near-useless competitors, driven by fake reviews and reviews, he claims. As a result, he says, revenue from FlickType has dropped to just $20,000 a month as scammers have slashed the potential revenue of users looking for a keyboard app.
According to the original complaint, Eleftheriou seeks to hold Apple accountable for the problems the FlickType app has faced with rejections and is asking Apple to restore lost revenue due to fraudulent apps. He believes Apple at first was thwarting competition with its own built-in keyboard and then did little to stop unscrupulous developers 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, breach of contract claim (“implied agreement in good faith and fair dealing”), fraud, negligent misrepresentation and negligence. Apple tried to file the entire case, citing similar lawsuits that were also dismissed. He also objected to the entire claim, saying that each cause of action did not present sufficient facts. But Superior Court Judge Peter H. Kirwan disagreed with that, ruling on each of the six items.
The court rejected Apple’s individual objections in the first three causes of action, meaning at least part of the claims in the case 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 allegations 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 will now move forward with the discovery.
Of course, there are much larger lawsuits underway against Apple, such as the antitrust lawsuit between Apple and Epic Games – now under appeal. But this particular case is also worth following up, as it doesn’t necessarily attempt to make an antitrust argument, but rather aims to see whether Apple can be held legally responsible for other aspects of how it runs its App Store business — including issues involving inconsistent app rejections that also afflict other developers and the prevalence of fraudulent apps that are being allowed to thrive on the App Store.
Several lawsuits against Apple from smaller developers have failed over the years, including those involving antitrust claims from BlueMail Blix Developer, Konverti current exchange app, Coronavirus Reporter health app and Cydia jailbreak app, between others. By comparison, Kpaw v. Apple does not openly accuse Apple of being a monopoly, but instead focuses on specific App Store issues.
“Apple has profited massively from the App Store monopoly, restricting the ability of developers to freely conduct business directly with their users,” Eleftheriou said. “Their anti-competitive practices have not been controlled for over a decade and are getting more and more brazen. I am now looking forward to presenting my case and am confident that the court will see Apple’s practices for what they are.”
Apple was also asked for comment, but has not yet responded.