Android security bug let malicious apps siphon off private user data

A security vulnerability in Android could have allowed malicious apps to siphon off sensitive data from other apps on the same device.

App security startup Oversecured found the flaw in Google’s widely used Play Core library, which lets developers push in-app updates and new feature modules to their Android apps, like language packs or game levels.

A malicious app on the same Android device could exploit the vulnerability by injecting malicious modules into other apps that rely on the library to steal private information, like passwords and credit card numbers, from inside the app.

Sergey Toshin, founder of Oversecured, told TechCrunch that exploiting the bug was “pretty easy.”

The startup built a proof-of-concept app using a few lines of code and tested the vulnerability on Google Chrome for Android, which relied on a vulnerable version of the Play Core library. Toshin said the proof-of-concept app was able to steal a victim’s browsing history, passwords and login cookies.

But Toshin said the bug also affected some of the most popular apps in the Android app store.

Google confirmed the bug, rated 8.8 out of 10.0 for severity, is now fixed. “We appreciate the researcher reporting this issue to us, and as a result it was patched in March,” said a Google spokesperson.

Toshin said app developers should update their apps with the latest Play Core library to remove the threat.

Apple ordered to not block Epic Games’ Unreal Engine, but Fortnite to stay off App Store

A district court denied Epic Games’ motion to temporarily restore Fortnite game to the iOS App Store, but also ordered Apple to not block the gaming giant’s ability to provide and distribute Unreal Engine on the iPhone-maker’s ecosystem in a mixed-ruling delivered Monday evening.

U.S. District Court Judge Yvonne Gonzalez Rogers said Apple can’t retaliate against Epic Games by blocking the gaming firm’s developer accounts or restrict developers on Apple platforms from accessing the widely-used Unreal Engine. 

“The record shows potential significant damage to both the Unreal Engine platform itself, and to the gaming industry generally, including on both third-party developers and gamers,” she said.

But the ruling was not a complete win for Epic Games, which had also requested the sleeper hit title Fortnite to be restored on the iOS App Store. Rogers said the game will remain off the App Store unless Epic Games attempted to bring it back in accordance with App Store guidelines. 

The Monday ruling caps — for now — the high-stake public battle between giants Apple and Epic Games over the fundamental rules of iPhone’s App Store. Epic broke Apple and Google’s app stores’ guidelines earlier this month when it provided Fortnite users on iOS and Android the ability to pay it directly. Apple and Google require developers on their platforms to use their respective payment processing systems and comply to parting with a commission — which for games, is a 30% of the transaction amount.

Epic’s move prompted Apple to remove Fortnite, perhaps the best selling mobile game to date, from its App Store. Anticipating what Apple might do, minutes after Fortnite was pulled from the App Store, Epic Games filed a lawsuit against Apple and kickstarted one of the weirdest — or boldest (depending on who you ask) — marketing campaign.

More to follow…

Unity’s IPO numbers look pretty … unreal?

Unity, the company founded in a Copenhagen apartment in 2004, is poised for an initial public offering with numbers that look pretty strong.

Even as its main competitor, Epic Games, is in the throes of a very public fight with Apple over the fees the computer giant charges developers who sell applications (including games) on its platform (which has seen Epic’s games get the boot from the App Store), Unity has plowed ahead, narrowing its losses and maintaining its hold on over half of the game development market.

For the first six months of 2020, the company lost $54.2 million on $351.3 million in revenue. The company narrowed its losses compared to 2019, when the company lost $163.2 million on $541.8 million in revenue, and 2018 when the company lost $131.6 million on $380.8 million in revenue. As of June 30, 2020 the company had total assets of $1.29 billion and $453.2 million in cash.

Increasing revenue and narrowing losses are things that investors like to see in companies that they’re potentially going to invest in, as they point to a path to profitability. Another sign of the company’s success is the number of customers that contribute more than $100,000 in annual revenue. In the first six month of the year, Unity had 716 such customers, pointing to the health of its platform.

The company will trade on the NYSE under the single-letter ticker “U”. The NYSE only has a few single letters left to offer, although Pandora gave up the letter P when it was bought by Liberty Media back in 2018.

Unlike Epic Games, Unity has long worked with the major platforms and gaming companies to get their engine in front of as many developers and gamers as possible. In fact, the company estimates that 53% of the top 1,000 mobile games on the Apple App Store and Google Play Store and over 50% of mobile, personal computer and console games were made with Unity.

Some of the top titles that the platform claims include Nintendo’s Mario Kart: Tour, Super Mario Run and Animal Crossing: Pocket Camp; Niantic’s Pokémon GO and Activision’s recent Call of Duty: Mobile are also Unity games.

The knock against Unity is that it’s not as powerful as Epic’s Unreal rendering engine, but that hasn’t stopped the company from making forays into industries beyond gaming — something that it will need to continue doing if it’s to be successful.

Unity already has a toehold in Hollywood, where it was used to recreate the jungle environment used in Disney’s “Lion King” remake (meanwhile, much of “The Mandalorian” was created using Epic’s Unreal engine).

Of course, Unity’s numbers also reveal that the size of its business is currently a bit smaller than its biggest rival. In 2019, Epic said it had earnings of $730 million on revenue of $4.2 billion, according to VentureBeat . And the North Carolina-based game developer is now worth $17.3 billion.

Still, the games market is likely big enough for both companies to thrive. “Historically there has been substantial industry convergence in the games developer tools business, but over the past decade the number of developers has increased so much, I believe the market can support two major players,” Piers Harding-Rolls, games analyst at Ampere Analysis, told the Financial Times.

Venture investors in the Unity platform have waited a long time for this moment, and they’re certainly confident in the company’s prospects.

The last investment round valued the company at $6 billion, with the secondary sale of $525 million worth of the company’s shares.

Unity’s IPO numbers look pretty … unreal?

Unity, the company founded in a Copenhagen apartment in 2004, is poised for an initial public offering with numbers that look pretty strong.

Even as its main competitor, Epic Games, is in the throes of a very public fight with Apple over the fees the computer giant charges developers who sell applications (including games) on its platform (which has seen Epic’s games get the boot from the App Store), Unity has plowed ahead, narrowing its losses and maintaining its hold on over half of the game development market.

For the first six months of 2020, the company lost $54.2 million on $351.3 million in revenue. The company narrowed its losses compared to 2019, when the company lost $163.2 million on $541.8 million in revenue, and 2018 when the company lost $131.6 million on $380.8 million in revenue. As of June 30, 2020 the company had total assets of $1.29 billion and $453.2 million in cash.

Increasing revenue and narrowing losses are things that investors like to see in companies that they’re potentially going to invest in, as they point to a path to profitability. Another sign of the company’s success is the number of customers that contribute more than $100,000 in annual revenue. In the first six month of the year, Unity had 716 such customers, pointing to the health of its platform.

The company will trade on the NYSE under the single-letter ticker “U”. The NYSE only has a few single letters left to offer, although Pandora gave up the letter P when it was bought by Liberty Media back in 2018.

Unlike Epic Games, Unity has long worked with the major platforms and gaming companies to get their engine in front of as many developers and gamers as possible. In fact, the company estimates that 53% of the top 1,000 mobile games on the Apple App Store and Google Play Store and over 50% of mobile, personal computer and console games were made with Unity.

Some of the top titles that the platform claims include Nintendo’s Mario Kart: Tour, Super Mario Run and Animal Crossing: Pocket Camp; Niantic’s Pokémon GO and Activision’s recent Call of Duty: Mobile are also Unity games.

The knock against Unity is that it’s not as powerful as Epic’s Unreal rendering engine, but that hasn’t stopped the company from making forays into industries beyond gaming — something that it will need to continue doing if it’s to be successful.

Unity already has a toehold in Hollywood, where it was used to recreate the jungle environment used in Disney’s “Lion King” remake (meanwhile, much of “The Mandalorian” was created using Epic’s Unreal engine).

Of course, Unity’s numbers also reveal that the size of its business is currently a bit smaller than its biggest rival. In 2019, Epic said it had earnings of $730 million on revenue of $4.2 billion, according to VentureBeat . And the North Carolina-based game developer is now worth $17.3 billion.

Still, the games market is likely big enough for both companies to thrive. “Historically there has been substantial industry convergence in the games developer tools business, but over the past decade the number of developers has increased so much, I believe the market can support two major players,” Piers Harding-Rolls, games analyst at Ampere Analysis, told the Financial Times.

Venture investors in the Unity platform have waited a long time for this moment, and they’re certainly confident in the company’s prospects.

The last investment round valued the company at $6 billion, with the secondary sale of $525 million worth of the company’s shares.

Apple contends Epic’s ban was a ‘self-inflicted’ prelude to gaming the App Store

Apple has filed legal documents opposing Epic’s attempt to have itself reinstated in the iOS App Store, after having been kicked out last week for flouting its rules. Apple characterizes the entire thing as a “carefully orchestrated, multi-faceted campaign” aimed at circumventing — perhaps permanently — the 30% cut it demands for the privilege of doing business on iOS.

Epic last week slyly introduced a way to make in-app purchases in its popular game Fortnite without going through Apple. This is plainly against the rules, and Apple soon kicked the game, and the company’s other accounts, off the App Store. Obviously having anticipated this, Epic then published a parody of Apple’s famous 1984 ad, filed a lawsuit and began executing what Apple describes quite accurately as “a carefully orchestrated, multi-faceted campaign.”

In fact, as Apple notes in its challenge, Epic CEO Tim Sweeney emailed ahead of time to let Apple know what his company had planned. From Apple’s filing:

Around 2am on August 13, Mr. Sweeney of Epic wrote to Apple stating its intent to breach Epic’s agreements:
“Epic will no longer adhere to Apple’s payment processing restrictions.”

This was after months of attempts at negotiations in which, according to declarations from Apple’s Phil Schiller, Epic attempted to coax a “side letter” from Apple granting Epic special dispensation. This contradicts claims by Sweeney that Epic never asked for a special deal. From Schiller’s declaration:

Specifically, on June 30, 2020, Epic’s CEO Tim Sweeney wrote my colleagues and me an email asking for a “side letter” from Apple that would create a special deal for only Epic that would fundamentally change the way in which Epic offers apps on Apple’s iOS platform.

In this email, Mr. Sweeney expressly acknowledged that his proposed changes would be in direct breach of multiple terms of the agreements between Epic and Apple. Mr. Sweeney acknowledged that Epic could not implement its proposal unless the agreements between Epic and Apple were modified.

One prong of Epic’s assault was a request for courts to grant a “temporary restraining order,” or TRO, a legal procedure for use in emergencies where a party’s actions are unlawful, a suit to show their illegality is pending and likely to succeed, and those actions should be proactively reversed because they will cause “irreparable harm.”

If Epic’s request were to be successful, Apple would be forced to reinstate Fortnite and allow its in-game store to operate outside of the App Store’s rules. As you might imagine, this would be disastrous for Apple — not only would its rules have been deliberately ignored, but a court would have placed its imprimatur on the idea that those rules may even be illegal. So it is essential that Apple slap down this particular legal challenge quickly and comprehensively.

Apple’s filing challenges the TRO request on several grounds. First, it contends that there is no real “emergency” or “irreparable harm” because the entire situation was concocted and voluntarily initiated by Epic:

Having decided that it would rather enjoy the benefits of the App Store without paying for them, Epic has breached its contracts with Apple, using its own customers and Apple’s users as leverage.

But the “emergency” is entirely of Epic’s own making…it knew full well what would happen and, in so doing, has knowingly and purposefully created the harm to game players and developers it now asks the Court to step in and remedy.

Epic’s complaint that Apple banned its Unreal Engine accounts as well as Fortnite related ones, Apple notes, is not unusual, considering the accounts share tax IDs, emails and so on. It’s the same “user,” for their purposes. Apple also says it gave Epic ample warning and opportunity to correct its actions before a ban took place. (Apple, after all, makes a great deal of money from the app as well.)

Apple also questions the likelihood of Epic’s main lawsuit (independent of the TRO request) succeeding on its merits — namely that Apple is exercising monopoly power in its rent-collecting on the App Store:

[Epic’s] logic would make monopolies of Microsoft, Sony and Nintendo, just to name a few.

Epic’s antitrust theories, like its orchestrated campaign, are a transparent veneer for its effort to co-opt for itself the benefits of the App Store without paying or complying with important requirements that are critical to protect user safety, security,
and privacy.

Lastly Apple notes that there is no benefit to the public interest to providing the TRO — unlike if, for example, Apple’s actions had prevented emergency calls from working or the like, and there was a serious safety concern:

All of that alleged injury for which Epic improperly seeks emergency relief could disappear tomorrow if Epic cured its breach…All of this can happen without any intervention of the Court or expenditure of judicial resources. And Epic would be free to pursue its primary lawsuit.

Although Apple eschews speculating further in its filings, one source close to the matter suggested that it is of paramount importance to that company to avoid the possibility of Epic or anyone else establishing their own independent app stores on iOS. A legal precedent would go a long way toward clearing the way for such a thing, so this is potentially an existential threat for Apple’s long-toothed but extremely profitable business model.

The conflict with Epic is only the latest in a series going back years in which companies challenged Apple’s right to control and profit from what amounts to a totally separate marketplace.

Most recently Microsoft’s xCloud app was denied entry to the App Store because it amounted to a marketplace for games that Apple could not feasibly vet individually. Given this kind of functionality is very much the type of thing consumers want these days, the decision was not popular. Other developers, industries and platforms have challenged Apple on various fronts as well, to the point where the company has promised to create a formal process for challenging its rules.

But of course, even the rule-challenging process is bound by Apple’s rules.

You can read the full Apple filing below:

Epic v. Apple 4:20-cv-05640… by TechCrunch on Scribd

Apple goes to war with the gaming industry

Most gamers may not view Apple as a games company to the same degree that they see Sony with PlayStation or Microsoft with Xbox, but the iPhone-maker continues to uniformly drive the industry with decisions made in the Apple App Store.

The company made the news a couple times late this week for App Store approvals. Once for denying a gaming app, and the other for approving one.

The denial was Microsoft’s xCloud gaming app, something the Xbox folks weren’t too psyched about. Microsoft xCloud is one of the Xbox’s most substantial software platform plays in quite some time, allowing gamers to live-stream titles from the cloud and play console-quality games across a number of devices. It’s a huge effort that’s been in preview for a bit, but is likely going to officially launch next month. The app had been in a Testflight preview for iOS, but as Microsoft looked to push it to primetime, Apple said not so fast.

The app that was approved was the Facebook Gaming app which Facebook has been trying to shove through the App Store for months to no avail. It was at last approved Friday after the company stripped one of its two central features, a library of playable mobile games. In a curt statement to The New York Times, Facebook COO Sheryl Sandberg said, “Unfortunately, we had to remove gameplay functionality entirely in order to get Apple’s approval on the stand-alone Facebook Gaming app.”

Microsoft’s Xbox team also took the unusually aggressive step of calling out Apple in a statement that reads, in-part, “Apple stands alone as the only general purpose platform to deny consumers from cloud gaming and game subscription services like Xbox Game Pass. And it consistently treats gaming apps differently, applying more lenient rules to non-gaming apps even when they include interactive content.”

Microsoft is still a $1.61 trillion company so don’t think I’m busting out the violin for them, but iOS is the world’s largest gaming platform, something CEO Tim Cook proudly proclaimed when the company launched its own game subscription platform, Apple Arcade, last year. Apple likes to play at its own pace, and all of these game-streaming platforms popping up at the same time seem poised to overwhelm them.

Image Credits: Microsoft

There are a few things about cloud gaming apps that seem at odds with some of the App Store’s rules, yet these rules are, of course, just guidelines written by Apple.  For Apple’s part, they basically said (full statement later) that the App Store had curators for a reason and that approving apps like these means they can’t individually review the apps which compromises the App Store experience.

To say that’s “the reason” seems disingenuous because the company has long approved platforms to operate on the App Store without stamping approval on the individual pieces of content that can be accessed. With “Games” representing the App Store’s most popular category, Apple likely cares much more about keeping their own money straight.

Analysis from CNBC pinned Apple’s 2019 App Store total revenue at $50 billion.

When these cloud gaming platforms like xCloud scale with zero iOS support, millions of Apple customers, myself included, are actually going to be pissed that their iPhone can’t do something that their friend’s phone can. Playing console-class titles on the iPhone would be a substantial feature upgrade for consumers. There are about 90 million Xbox Live users out there, a substantial number of which are iPhone owners I would imagine. The games industry is steadily rallying around game subscription networks and cloud gaming as a move to encourage consumers to sample more titles and discover more indie hits.

I’ve seen enough of these sagas to realize that sometimes parties will kick off these fights purely as a tactic to get their way in negotiations and avoid workarounds, but it’s a tactic that really only works when consumers have a reason to care. Most of the bigger App Store developer spats have played in the background and come to light later, but at this point the Xbox team undoubtedly sees that Apple isn’t positioned all that well to wage an App Store war in the midst of increased antitrust attention over a cause that seems wholly focused on maintaining their edge in monetizing the games consumers play on Apple screens.

CEO Tim Cook spent an awful lot of time in his Congressional Zoom room answering question about perceived anticompetitiveness on the company’s application storefront.

The big point of tension I could see happening behind closed doors is that plenty of these titles offer in-game transactions and just because that in-app purchase framework is being live-streamed from a cloud computer doesn’t mean that a user isn’t still using experiencing that content on an Apple device. I’m not sure whether this is actually the point of contention, but it seems like it would be a major threat to Apple’s ecosystem-wide in-app purchase raking.

The App Store does not currently support cloud gaming on Nvidia’s GeForce platform or Google’s Stadia which are also both available on Android phones. Both of these platforms are more limited in scope than Microsoft’s offering which is expected to launch with wider support and pick up wider adoption.

While I can understand Apple’s desire to not have gaming titles ship that might not function properly on an iPhone because of system constraints, that argument doesn’t apply so well to the cloud gaming world where apps are translating button presses to the cloud and the cloud is sending them back the next engine-rendered frames of their game. Apple is being forced to get pretty particular about what media types of apps fall under the “reader” designation. The inherent interactivity of a cloud gaming platform seems to be the differentiation Apple is pushing here — as well as the interfaces that allows gamers to directly launch titles with an interface that’s far more specialized than some generic remote desktop app.

All of these platforms arrive after the company already launched Apple Arcade, a non-cloud gaming product made in the image of what Apple would like to think are the values it fosters in the gaming world: family friendly indie titles with no intrusive ads, no bothersome micro-transactions and Apple’s watchful review.

Apple’s driver’s seat position in the gaming world has been far from a wholly positive influence for the industry. Apple has acted as a gatekeeper, but the fact is plenty of the “innovations” pushed through as a result of App Store policies have been great for Apple but questionable for the development of a gamer-friendly games industry.

Apple facilitated the advent of free-to-play games by pushing in-app purchases which have been abused recklessly over the years as studios have been irresistibly pushed to structure their titles around principles of addiction. Mobile gaming has been one of the more insane areas of Wild West startup growth over the past decade and Apple’s mechanics for fueling quick transactions inside these titles has moved fast and broken things.

Take a look at the 200 top grossing games in the App Store (data via Sensor Tower) and you’ll see that all 199 of them rely solely on in-app micro-transaction to reach that status — Microsoft’s Minecraft, ranked 50th costs $6.99 to download, though it also offers in-app purchases.

In 2013, the company settled a class-action lawsuit that kicked off after parents sued Apple for making it too easy for kids to make in-app purchases. In 2014, Apple settled a case with the FTC over the same mechanism for $32 million. This year, a lawsuit filed against Apple questioned the legality of “loot box” in-app purchases which gave gamers randomized digital awards.

“Through the games it sells and offers for free to consumers through its AppStore, Apple engages in predatory practices enticing consumers, including children to engage in gambling and similar addictive conduct in violation of this and other laws designed to protect consumers and to prohibit such practices,” read that most recent lawsuit filing.

This is, of course, not how Apple sees its role in the gaming industry. In a statement to Business Insider responding to the company’s denial of Microsoft’s xCloud, Apple laid out its messaging.

The App Store was created to be a safe and trusted place for customers to discover and download apps, and a great business opportunity for all developers. Before they go on our store, all apps are reviewed against the same set of guidelines that are intended to protect customers and provide a fair and level playing field to developers.

Our customers enjoy great apps and games from millions of developers, and gaming services can absolutely launch on the App Store as long as they follow the same set of guidelines applicable to all developers, including submitting games individually for review, and appearing in charts and search. In addition to the App Store, developers can choose to reach all iPhone and iPad users over the web through Safari and other browsers on the App Store.

The impact has — quite obviously — not been uniformly negative, but Apple has played fast and loose with industry changes when they benefit the mothership. I won’t act like plenty of Sony and Microsoft’s actions over the years haven’t offered similar affronts to gamers, but Apple exercises the industry-wide sway it holds, operating the world’s largest gaming platform, too often and gamers should be cautious in trusting the App Store owner to make decisions that have their best interests at heart.


If you’re reading this on the TechCrunch site, you can get more of my weekly opinions and notes on the news by subscribing to Week in Review here, and following my tweets here.

This Week in Apps: A guide to the US antitrust case against Apple, Microsoft in talks to buy TikTok

Welcome back to This Week in Apps, the TechCrunch series* that recaps the latest OS news, the applications they support and the money that flows through it all.

The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending three hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

In this series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.

* This Week in Apps was previously available only to Extra Crunch subscribers. We’re now making these reports available to all TechCrunch readers.  

This week, we’re focused on rounding up the news from the U.S. antitrust investigation into Apple, as it pertains to apps, the App Store and developers.

Let’s dive in.

Apps and the Antitrust Hearings

app store icon 2

Image Credits: TechCrunch

Developers’ concern over Apple’s alleged anti-competitive behavior with regard to how it runs the App Store was one of the many topics that came up during this week’s antitrust hearings. Apple CEO Tim Cook defended the company’s App Store commission structure and treatment of developers in his sworn testimony before the House Antitrust Subcommittee.

But the documents the committee had collected indicate that there were times, in fact, when developers had not all been treated equally, nor did they all have the same terms. Though it’s not surprising, or even unusual, to hear that Apple had carved out special deals for larger companies, the company has continued to insist the App Store is an even playing field for all developers, both large and small. That’s not the case, the documents reveal, as larger companies got deals allowing them to pay less in commission or had access to faster app reviews and dedicated personnel for their needs.

In addition, the documents detail how Apple’s control of the App Store allows it to unilaterally make decisions about app pauses and removals. This impacts large companies, like Spotify, as well as small developers, like those detailed in these emails:

Documents from the US antitrust investigation into Apple by TechCrunch on Scribd

Here are key sections that pertain to Apple & the App Store:

  • Apple Cut a Special Deal with Amazon, pp. 34-51; 67-69: Though Apple claims an even playing field for developers, its rules didn’t apply to larger companies. As part of an extensive deal with Amazon over its Prime Video app and Apple device sales on Amazon.com, Amazon agreed to remove “tens of thousands” of unauthorized (not necessarily counterfeit) sellers of Apple products, to give Apple control over its experience on the retail site, among other things. Apple let Amazon pay a 15% commission for in-app sign-ups on Prime Video subscriptions, instead of the 30% apps have to pay during their first year.
  • Apple Cut a Special Deal with Baidu, pp. 52-54: Apple also negotiated with Baidu to make it the default search engine in China, and as part of that agreement, offered it access to an “App Review Fast Track,” where Baidu would be allowed to send Apple a beta app for review to speed up the approval process. Apple also assigned two key contacts to work with Baidu. Again, not surprising that a big company got special treatment, but the party line is that all developers are treated equally. Access to faster app reviews is not something accessible to all developers, under certain conditions, or even publicly documented.
  • Apple Considered a 40% Commission, pp. 107-109: Apple in 2011 debated raising its commission to 40%. “I think we may be leaving money on the table if we just asked for about 30% of the first year of sub,” one exec said. Tim Cook, in the hearing, said Apple wouldn’t raise commissions because it competed for developer interest, too.
  • Requiring Apple’s Apps as the Default, pp. 32-33: Apple, until recently, never allowed iOS users to make a different app from a third-party developer their default app for that task on their device. That means map links open in Apple Maps and Calendar appointments lead to Apple’s Calendar app, and so on. The upcoming iOS 14 release will allow users to change their default browser and email apps, however. The documents indicate Apple was in possession of complaints from users who wanted to be able to personalize their device to their own needs. Today, Apple still has no plans to allow third-party apps to be set as the default for maps, music, voice assistance, messages, reminders, notes and others, which impacts startups and indie developers who make quality products but can’t gain a foothold on iOS/iPadOS.
  • Requiring WebKit for all browsers, pp. 55-56: Apple emails discussed Opera’s 2010 plans to submit a browser it claimed was “up to 6 times faster than Safari,” noting that “it is unlikely that this Opera release is using our webkit, which is required.” Opera, a much smaller company than Apple, was hoping to challenge Apple’s control over the browser experience by taking claims to the press — a tactic often used to demonstrate the limits of developers’ rights to distribute apps on iPhone.
  • Banning Apps for Spam, pp. 1-5: Apple banned a developer for spamming the App Store, despite the developer’s claim that he was only creating separate apps because of issues with discoverability on the App Store. The developer, which published a series of maps/guides apps, said people could search for a city by name and find the standalone maps app for that city. But they weren’t being directed to the consolidated app that Apple demanded replace the individual ones, for those same searches. The developer said he would much rather use one single app, as that would be easier to maintain, but had built separate ones because of discoverability issues. Internal Apple emails indicate that Apple stopped accepting the developer’s submissions, forcing them to migrate to a consolidated app.
  • App Store Fraud, pp. 6-18: The NYT in 2012 reported on issues around fraudulent charges hitting developers’ apps, which had amounted to millions of dollars for at least one developer over the course of a year. Though fraud is a prevalent problem with digital purchases, the developers’ larger complaint was not that fraud occurred — they didn’t blame Apple for that, necessarily — but that Apple was unresponsive to their requests for help. Apple didn’t reply to emails and didn’t offer a dedicated phone line for complaints, they said. Apple’s internal emails indicated the company didn’t believe there was a real issue with fraud. (“We’ve repeatedly answered this question and haven’t yet identified a case where there is an actual issue,” one exec said.) Apple execs also said the issue had to do with developers who had high levels of refunds and the timing of their refunds. The emails indicated that Apple would “intentionally reply with a standard and rather vague response” about how reporting won’t reconcile due to timing differences and noted that “we do not individually investigate each query.” But the company was aware that some developers had issues. “It is unfortunate as the issue is very small as a percentage of our business and impacts a very small percentage of our developers,” Apple said. Of course, at Apple’s scale, anything that happens to a handful of developers will be a “small percentage” of its business. But for developers, it could be their entire business.
  • App Store Search Changes, pg. 21; pg. 28: A November 2015 email indicated that App Store Search changes implemented that month made it harder to find some apps. For example a search for keyword “Twitter” never returned the app “Tweetbot for Twitter,” at all, despite the app’s high ranking and general popularity, evidenced by reviews. Meanwhile, an app that hadn’t been updated since 2008 (Tweeter) would appear in the search results. Phil Schiller forwarded the email to Apple execs with a note “FYI.” (TechCrunch had also reported at the time the changes had impacted the rankings of several iPad apps.) Search issues continued in 2017, as another email indicated that the developer’s app wasn’t being returned for critical App Store keyword search terms in the first 100 results, even for an exact keyword match. While Apple may experience technical problems when it makes changes, developers are left with no resource when those changes effectively “disappear” them from the App Store.
  • Apple Removes Parental Control Apps, pp. 70-76, 80-87: Tim Cook was directly questioned about Apple’s removal of screen time apps, and responded that the removals were related to those apps’ use of privacy-invading MDM technology. The documents indicate even Apple was concerned about its move to ban the apps, given their removal directly followed the launch of Apple’s own Screen Time solution. “This is quite incriminating. Is it true?” one exec asked after The NYT covered the story (four months after TechCrunch broke the news!). The apps that were banned didn’t all use MDM, we reported. In addition, Apple didn’t offer a pathway to compliance with regard to apps’ off-brand use of MDM until June 2019. In Congress’ stash of emails from impacted developers, one said they spent an additional $30K trying to fix the problem, but was specifically told “we no longer support Parental Control Apps” even though the App Store still had several listed. A number of consumers also complained about how the apps they relied on had disappeared.
  • Apple used App Store to Block Large Companies’ Apps, Too, pp. 77-79, 80-98, 97-98, 102-106: Indie developers weren’t the only ones at the mercy of Apple’s control over the App Store. Verizon (Disclosure: TechCrunch’s parent company’s parent), Spotify, T-Mobile, Amazon and Valve (Steam) also had submitted complaints about their apps not being allowed in or being paused, due to terms violations, and being forced to use Apple’s in-app purchases. Spotify, for example, said it had built a special landing page just for compliance with App Store Rules about not directing users to non-App Store purchase mechanisms. But Apple rejected its app updates for sending an email after a trial period to users directing them to upgrade from Spotify’s website. “Apple claimed that Spotify could not communicate with its own customers, inside its own app, about the existence of its own Premium service — even if there was no link, button, or mention of any offer of any kind,” Spotify legal wrote to Apple legal. “Shortly after our meeting in early July, Apple objected to an out-of-app welcome email to free users, claiming that this email violated the App Store Rules because it mentioned the Premium service,” it said. Apple directly competes with Spotify, which has money to pay expensive lawyers. What are indie developers to do when met with similar situations?

Breaking News

Trump administration to order China-based ByteDance to sell TikTok’s U.S. Operations

Image Credit: Costfoto / Barcroft Media (Photo credit should read Costfoto / Barcroft Media via Getty Images

The Trump administration said on Friday it will sign an order directing ByteDance to divest its ownership of the U.S. app, TikTok, if it wants to continue to operate in the U.S., Bloomberg reported. The app’s associations with China have been under increased scrutiny in the U.S., along with other Chinese tech firms. Most recently, the app has been undergoing a national security review for potential risks. After the initial news, reports bubbled up that Microsoft is in talks to buy the Chinese social network

TikTok has become one of the largest apps in the world and is valued at $50 billion, Reuters reported. The company has been looking for alternative options, including a proposal from some investors, like Sequoia and General Atlantic, to transfer majority control to them. TikTok also fielded acquisition offers from other companies and investment firms, the report had said.

In the meantime, TikTok has recently promised to open its algorithm and fund U.S. creators. It also made another key U.S. hire, with Sandie Hawkins, former VP and head of Americas for Adobe’s Advertising Cloud, now GM of global business solutions for both TikTok and its parent ByteDance.

Hoping to capitalize on the chaos, Triller sued TikTok over patent infringement.

Other Headlines

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Image credit: Carl Court/Getty Images

Funding and M&A

  • YC alum Paragon snags $2.5 million seed for low-code app integration platform. Investors include Y Combinator, Village Global, Global Founders Capital, Soma Capital and FundersClub.
  • Revolut extends Series D round to $580 million with $80 million in new funding. The fintech startup had raised $500 million led by TCV at a $5.5 billion valuation in February.
  • Huuuge Games acquired games studio Double Star, Apptopia reported, citing Gamesindustry.biz. The studio’s top title is the game Bow Land, which has generated $3.7k via in-app purchases this year, the firm said.
  • Toppr raises $46 million to scale its online learning platform in India. Toppr is one of the largest online learning startups in India and offers apps for iOS, Android and web.
  • Delightree raises $3 million to help franchise business owners simplify their operations. The startup aims to move much of what currently happens through pen-and-paper over to smartphones.

Downloads

Google One 

Image Credits: Google

Google introduced a mobile utility for its cloud storage service Google One. The app will automatically back up your phone’s contents, like photos, videos, contacts and calendar events, using the 15 GB of free storage that comes with a Google account.

Facetune Video

Image Credits: TechCrunch

Lightricks, the startup behind a suite of photo and video editing apps — including most notably, selfie editor Facetune 2 — is taking its retouching capabilities to video. Today, the company is launching Facetune Video, a selfie video editing app, that allows users to retouch and edit their selfie and portrait videos using a set of AI-powered tools.

Apple’s App Store commission structure called into question in antitrust hearing

Apple CEO Tim Cook defended the company’s App Store commission structure in his sworn testimony before the House Antitrust Subcommittee on Wednesday. He claimed the majority of the apps pay no commission at all, with others paying either 15 or 30 percent, based on the specifics of their particular situation. He said developers were all treated equally and that Apple wouldn’t raise commissions, because it had to compete for developer interest in its platform as well.

But the documents shared by the House subcommittee as part of their investigation indicate that exceptions to Apple’s rules have been made — notably, with Amazon’s Prime Video app. In addition, Apple may have never raised commissions, but discussions weren’t off the table. It had once even considered raising commissions to 40% in particular situations.

The lawmakers had come to the hearing armed with internal Apple emails and interviews from App Store developers who argued that Apple doesn’t uniformly enforce its rules and plays favorites. But their questioning of Cook over App Store fees, combined with a format that limited execs’ ability to respond at length, initially seemed to reveal little in terms of new information about Apple’s practices.

For instance, when asked directly about how the App Store worked, Cook simply restated the store’s published rules — that is, for app developers who have to pay commissions, they pay only 15 or 30 percent. The current guidelines require 30% for apps selling digital goods or services, with a drop to 15% in year two for subscription apps. The rules also document a carve-out for “reader” apps like audiobook apps, streaming services, news publications, and other competitive products which have the option of forgoing in-app purchases.

 

Cook also squeezed in a mention about how the vast majority of App Store apps, 84%, pay nothing to Apple in commissions. It’s the remaining 16% that pay, he noted.

And when asked if Apple was the sole gatekeeper as to what gets published on the App Store, Cook agreed that it was — given that the App Store was a “feature of the iPhone, much like the Camera and the chip is.” He clarified that Apple’s control over apps only extended to native software applications, not web apps, but denied Apple treated developers unfairly.

“We treat every developer the same. We have open and transparent rules,” Cook said, in his testimony. “It’s a rigorous process, because we care so deeply about privacy and security and quality. We do look at every app before it goes on,” he added.

But emails in 2016 between Apple SVP Eddy Cue and Amazon CEO Jeff Bezos, shared here on the House Judiciary Committee’s website, indicate that Apple, in fact, appears to have negotiated a special deal with Amazon over its Amazon Prime Video app for iOS and Apple TV.  In an email dated Nov. 2016 — before the 2017 launch of the Prime Video tvOS app —  Apple agreed to take only a 15% revenue share for customers that signed up in the app using Apple’s payment mechanism. (Typically, subscription apps don’t drop from 30% to 15% until year two.)

Apple this April confirmed  it had a special program for Prime Video and a small handful of other apps, which were subscription video entertainment providers. The program allowed those companies to rent or sell movies and TV shows to customers using the payment methods the companies already had on file, as well as more deeply integrate with Siri. But Apple hadn’t said that this special program would include a reduced commission on subscriptions or any other in-app upsells, as these emails confirm were points of discussion.

This wouldn’t be the first time Apple saw its commission structure as having some room to flex.

When Cook was questioned as to whether there was anything that could stop Apple from raising commissions to, say, 50%, the CEO responded that Apple had never increased commissions since day one. He also argued, when asked if anything could stop it from doing so, that competition for developer interest would stop it from raising its cut.

“There is a competition for developers, just like there’s a competition for customers. And so the competition for developers — they write their apps for Android or Windows or Xbox or Playstation,” said Cook. “We have fierce competition on the developer side and the customer side which is essentially — it’s so competitive, I would describe it as a street fight for market share in the smartphone business,” he added.

But in internal emails from 2011, Apple did discuss raising commissions — all the way to 40% for the first year of recurring subscriptions. “I think we may be leaving money on the table if we just asked for about 30% of the first year of sub,” Cue had written at the time.

Of course, Apple didn’t go so far as to actually make that change in the years that passed. But these emails indicate there’s more to Apple’s thinking — and its discussions around the commission structure — than the even playing field Cook testified to.

After numerous rejections, Struck’s dating app for the Co-Star crowd hits the App Store

Founded by former Apple engineers, a new app called Struck wants to be the Tinder for the Co-Star crowd. In other words, it’s an astrology-based matchmaker. But it took close to 10 attempts over several months for the startup to get its app approved by Apple for inclusion in the App Store. In nearly every rejection, app reviewers flagged the app as “spam” either due to its use of astrology or, once, simply because it was designed for online dating.

Apple continually cited section 4.3 of its App Store Review Guidelines in the majority of Struck’s rejections, with the exception of two that were unrelated to the app’s purpose. (Once, it was rejected for use of a broken API. Another rejection was over text that needed correction. It had still called itself a “beta.”)

The 4.3 guideline is something Apple wields to keep the App Store free from what it considers to be clutter and spam. In spirit, the guideline makes sense, as it gives Apple permission to make more subjective calls over low-quality apps.

Today, the guideline states that developers should “avoid piling on to a category that is already saturated,” and reminds developers that the App Store has “enough fart, burp, flashlight, fortune telling, dating, and Kama Sutra apps, etc. already.”

In the document, Apple promises to reject anything that “doesn’t offer a high-quality experience.”

Image Credits: Struck

This guideline was also updated in March to further raise the bar on dating apps and create stricter rules around “fortune-telling” apps, among other things.

Struck, unfortunately, found itself in the crosshairs of this new enforcement. But while its app may use astrology in a matchmaking process, its overall design and business model is nowhere close to resembling that of a shady “fortune-telling” app.

In fact, Struck hasn’t even implemented its monetization model, which may involve subscriptions and à la carte features at a later date.

Rather, Struck has been carefully and thoughtfully designed to provide an alternative to market leaders like Tinder. Built by a team of mostly women, including two people of color and one LGBTQ+ team member, the app is everything mainstream dating apps are not.

Image Credits: Struck

Struck doesn’t, for example, turn online dating into a Hot-or-Not style game. It works by first recommending matches by way of its understanding of users’ detailed birth charts and aspects. But you don’t have to be a true believer in astrology to enjoy the experience. You can use the app just for fun if you’re open-minded, the company website says. “Skeptics welcome,” the website advertises.

And while Tinder and others tend to leverage psychological tricks to make their apps more addictive, Struck aims to slow things down in order to allow users to once again focus on romance and conversations. There are no endless catalogs of head shots to swipe upon in Struck. Instead, it sends you no more than four matches per day and you can message only one of the four.

Image Credits: Struck

The app’s overall goal is to give users time to analyze their matches’ priorities and values, not just how they appear in photos.

If anything, this is precisely the kind of unique, thoughtfully crafted app the App Store should cater to, not the kind it should ban.

“We come from an Apple background. We come from a tech background. We were very insistent on having a good, quality user interface and user experience,” explains Struck co-founder and CEO Rachel Lo. “That was a big focus for us in our beta testing. We honestly didn’t expect any pushback when we submitted to the App Store,” she says.

Image Credits: Struck

But Apple did push back. After first submitting the app in May, Struck went through around nine rounds of rejections where reviewers continued to claim it was spam simply for being an astrology-based dating application. The team would then pull out astrology features hoping to get the app approved… with no luck. Finally, one reviewer told them Struck was being rejected for being a dating app.

“I remember thinking, we’re going to have to shut down this project. There’s not really a way through,” recounts Lo. The Struck team, in a last resort, posted to their Instagram page about their struggles and how they felt Apple’s rejections were unfair given the app’s quality. Plus, as Lo points out, the rejection had a tinge of sexism associated with it.

“Obviously, astrology is a heavily female-dominated category,” she says. “I took issue with the guideline that says ‘burps, farts and fortune-telling apps.’ I made a fuss about that verbiage and how offensive it is for people in most of the world who actually observe astrology.”

Image Credits: Struck

Despite the founders’ connections within the technology industry, thanks to their ex-Apple status and relationships with journalists who would go on to plead their case, Struck was not getting approved.

Finally, after several supporters left comments on Lisa Jackson’s Instagram where she had posted about WWDC, the app was — for unknown reasons — suddenly given the green light. It’s unclear if the Instagram posts made a difference. Even the app reviewer couldn’t explain why the app was now approved, when asked.

The whole debacle has soured the founders on the way Apple today runs its App Store, and sees them supportive of the government’s antitrust investigations into Apple’s business, which could result in new regulations.

“We had no course of action. And it felt really, really wrong for this giant company to basically be squashing small developers, says Lo. “I don’t know what’s going to become of our app — we hope it’s successful and we hope we can build a good, diverse business from it,” she continues. “But the point was that we weren’t even being given the opportunity to distribute our app that we had spent nine months building.”

Image Credits: Struck

Though Apple is turning its nose up at astrology apps, apparently, you don’t have to take astrology to heart to have fun with apps like Struck or those that inspired it, such as Co-Star. These newer Zodiac apps aren’t as obsessed with predicting your future as they are with offering a framework to examine your emotions, your place in the world and your interpersonal relationships. That led Co-Star to snag a $5 million seed round in 2019, one of many astrology apps investors were chasing last year as consumer spend among the top 10 in this space jumped 65% over 2018.

Struck, ultimately, wants to give the market something different from Tinder, and that has value.

“We want to challenge straight men since it is — quote unquote — a traditionally feminine-looking app,” says Lo. “For us, it’s 2020. It’s shocking to us that every dating app looks like a slot machine. We want to make something that has a voice and makes women feel comfortable. And I think our usership split between the genders kind of proved that.”

Struck is live today on the App Store — well, for who knows how long.

It initially caters to users in the Bay Area and LA and will arrive in New York on Friday. Based on user feedback, it will slowly roll out to more markets where it sees demand.

US beat China on App Store downloads for first time since 2014, due to coronavirus impact

The U.S. App Store’s downloads have surpassed China’s downloads for the first time since 2014. According to data from Sensor Tower’s Q2 2020 report, out today, the U.S. App Store saw 27.4% year-over-year growth in the quarter, compared to the 2.1% growth for the China App Store. During the quarter, the U.S. App Store generated 2.22 billion new installs compared with China’s 2.06 billion downloads, to regain the top position. This then translated to the U.S. beating China on App Store consumer spend, as well.

Contributing to the shift was the impact of the coronavirus pandemic on both China and the U.S.

The U.S. surpassed China on installs beginning in April and lasting all the way through June, the firm found.

China in Q2, meanwhile, was coming down from its own abnormally high number of downloads in March and April, due to COVID-19. But as its download figures began to normalize, the pandemic was wreaking havoc in the U.S., where it hit slightly later.

This led to the U.S. to see a surge in downloads, as suddenly the population was forced to work from home, attend school from home and entertain themselves at home with apps, games and streaming services.

Image Credits: Sensor Tower

Sensor Tower tells TechCrunch there was particularly significant growth in U.S. business and education apps in Q2, as a result. These categories were the largest contributors to the U.S. surpassing China’s installs.

Business app downloads grew 133.3% in Q2, followed by education (84.4%), health & fitness (57.7%), news 44.9%) and social networking (42.4%).

Image Credits: Sensor Tower

Video conferencing app Zoom, in particular, had a breakout quarter and even shattered the record for App Store installs, with nearly 94 million total downloads in a single quarter. The prior record had been set by TikTok, which had in Q1 2020 seen 67 million downloads in a single quarter. No other non-game app has ever surpassed 50 million installs in a quarter, Sensor Tower noted.

TikTok still had a strong Q2, with nearly 71 million App Store downloads in the quarter, representing 154% year-over-year growth. Its top two download markets were both the U.S. and China — the latter where it’s known as Douyin.

Image Credits: Sensor Tower

Mobile gaming was also a big hit in the U.S., as people stayed home under government lockdowns. Top mobile games by App Store downloads included titles like Save The Girl, Roblox, Go Knots 3D, Coin Master, Tangle Master 3D, Fishdom, ASMR Slicing, Call of Duty: Mobile and others.

On this front, Roblox had a stellar quarter as kids stayed at home and went online gaming, due to being disconnected from school and their playmates in real life. Roblox’s gaming app shot up the U.S. rankings from No. 11 in Q1 2020 to No. 2 in Q2, and achieved a new high of 8.6 million downloads in the quarter.

Rollic Games had two hits in the quarter, Go Knots 3D and Tangle Master 3D, each with over 5 million App Store downloads. Its Repair Master 3D title also came in at No. 20.

Both Zoom and Rollic Games were the only new top publishers to find themselves in the top 10 on the App Store in Q2, the report found.

Image Credits: Sensor Tower

Though the U.S. surpassed China in the quarter for the first time in years, the rest of the top five — Japan, Great Britain and Russia — remained the same as last quarter, though growing on a year-over-year basis.

Related to the surge of new downloads, the U.S. also surpassed China on consumer spending on the App Store for the first time since Q4 2018 — but that was only by 1.6% (around $53 million). In Q2 2020, the U.S. surpassed China by 14%, or about $717 million.

The U.S. also saw more significant quarter-over-quarter growth in spending during the COVID-19 outbreak, growing 20% between Q1 and Q2. In China, the consumer spending growth on the App Store was just 5% between Q4 2019 and Q1 2020, when it felt the full impact of the virus.