How Much Does Apple Care About App Store Looting?

The untenable direction of the iPhone app ecosystem, shepherded exclusively by Apple, has been apparent to developers for a long time. But coming to a point, it seems, aren't the older problems of reviewer capriciousness—we're talking straight dollars.

Piracy of apps has been a problem virtually since the beginning of the App Store. While the $450 million loss to pirated apps floated today is undoubtedly too high, as others have written, piracy is rampant, and given the size of the ecosystem (literally billions of apps downloaded) we are talking about millions of dollars, even considering that many pirated apps would've never been a sale in the first place. Pirating apps being what I'd call "direct" looting.

On the other side, which Peter Kafka dug into today, is what I'd call indirect looting—masquerade apps, like one that costs 99 cents and repackages the NYT's mobile content, even though the legit NYT app is very much free. No one's "stealing" the NYT app, but they are profiting off of its free content.

Here's the thing: Apple is not merely the exclusive means by which an app enters the App Store, but by extension, Apple controls the only legitimate way for an app to reach an iPhone. This is very different from, say, Macs, where they have virtually no control over what applications are installed or how they get there.

So it's curious, to say the least, that this is their position on IP infringement in the App Store, as told to Peter Kafka:

As an IP holder ourselves, we understand the importance to developers of protecting their IP. We have a process in the App Store for developers to alert us to possible IP infringement. When we're notified, our policy includes the removal of the infringing app until a resolution is reached between the parties.

As he points out, this passive—versus aggressive hunt-and-kill offenders—stance, is the same way Google handles IP infringement on YouTube. (Which we all know is basically a joke, and why we still go to YouTube.) The conflict of interest is, not coincidentally, the same as Google's: Apple makes money (30 percent) on masquerade apps, the same way Google pulls in ad dollars on infringing videos.

The reason to more seriously consider the two problems is that, if some rumors and speculation are true, the Apple Tablet will use essentially the same model as the iPhone for applications, with Apple as the exclusive distributor via the App Store. And if the tablet is The Next Thing in computing, the problems are just beginning. Perhaps an appropriately nuclear response to app infringement is simply waiting for the situation to demand it, or will be announced shortly.

Pirated software obviously isn't a new thing, or exclusive to the iPhone (Photoshop anyone?). The point is simply that by making itself the God of iPhone applications, Apple's put itself in a vastly different position than, say, Microsoft is, when it comes to pirated apps on Windows—one that seems imbued with some sense of responsibility to app developers. (I mean they're approving these apps for sale.) So it's strange to see, at least on the face of things, it's not as zealously blocking IP infringement as it has boobs and dirty words in apps. [ReadWriteWeb, MediaMemo]