Apple Defends App Review, Payment System to Deflect Epic Claims

(Bloomberg) -- Apple Inc. provided in-depth detail on how many apps it rejected last year and why its iPhone payment system keeps customers secure, seeking to deflect claims from Epic Games Inc. that its review process and purchase system is a deterrent to competition.

The Cupertino, California-based technology giant on Tuesday said in a statement that it prevented more than $1.5 billion in “potentially fraudulent transactions” last year, underscoring the need for its proprietary payment system at the heart of the on-going antitrust trial with Epic. Over the course of litigation brought by Epic, the game maker has claimed that Apple uses its payment system, which takes a 15% to 30% cut of transactions, and app approval process to juice profits and hurt developers.

Read more: Apple Attacked for ‘Walled Garden’ Store as Epic Trial Begins

The iPhone maker provided several new statistics about its app review process and payment system to back up its defense that those measures are in place to protect consumers:

In total, almost 1 million new apps and nearly 1 million more app updates were rejected or removed from the App Store in 202048,000 apps were turned down in 2020 for having hidden features, while more than 150,000 apps were refused for being misleading or manipulating users into buying itemsIn 2020, 95,000 apps were removed for engaging in a practice dubbed “bait-and-switch,” where a developer remotely alters the app after it’s approved to add banned featuresSince 2020, 1 billion starred ratings and 100 million reviews were processed470,000 developer accounts were terminated last year and 205,000 developer enrollments were rejected, barring those users from submitting an app to the store.In 2020 alone, 244 million user accounts were deactivated due to fraud, while 424 million account sign-ups were rejected because they displayed patterns consistent with fraudulent and abusive activity

Apple said its app review team “is an essential line of defense” and can protect users from apps that would facilitate the purchase of drugs, predatory loans, gambling and pornography. The company blocked 110,000 apps found on pirate app stores that circumvented its App Store over the last year and blocked 3.2 million apps distributed through its enterprise program in the last month.

The trial in Oakland, California, comes as Apple faces a backlash -- with billions of dollars in revenue on the line -- from global regulators and some app developers who say its standard App Store fee of 30% and other policies are unjust and self-serving. Apple’s disclosure of how many apps it rejects also serves its argument against Epic’s request for a ruling that would unravel the app review process and pave the way for alternative payment systems.

Read more: How Apple’s App Store Sparked an Epic Trial: QuickTake

The fight with Epic blew up in August when the game maker told customers it would replace Apple’s in-app purchase system with its own, circumventing Apple’s commissions from add-ons inside of Fortnite. Apple then removed the game, cutting off access for more than a billion customers.

Apple, which vehemently denies abusing its market power, has called Epic’s legal gambit a “fundamental assault” on a business model that’s beneficial to both developers and consumers.

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