Apple pulls apps over privacy concerns

By Dow Jones Newswires
Posted July 6, 2010 at 2:13 p.m.

Apple Inc. removed a host of applications from its popular App Store and acknowledged  that a developer had engaged in fraudulent purchases, a move that raises concerns about an operation seen as the gold standard for mobile application marketplaces.

On Monday, Apple said applications created by Thuat Nguyen had been removed and alleged Nguyen had engaged in “fraudulent purchase patterns.” The move followed complaints by App Store users that their accounts had been accessed to purchase applications made by Nguyen.

Nguyen could not be located for comment.
The moves comes as Cupertino, Calif.-based Apple continues to leverage the strength of its App Store to sell more of its mobile products, such as new iPhone 4 and iPad tablet. By giving customers an easy way to access software, Apple creates a reason for people to buy its hardware. The App Store sells more than 225,000 apps that do everything from help users find restaurants to translate foreign languages.

The success of the App Store, however, has generated controversy. Criticism of Apple’s practices has mounted because the company tightly controls what applications can be sold through the App Store. Apple has also had a hard time approving applications in a timely manner and kept some products that compete with its services off  the App Store.

Last month, Apple Chief Executive Steve Jobs told a conference that Apple had addressed many of those concerns and approved 95 percent of applications within a week of submission. Still, Apple has refused some competing products, including Google Inc.’s Google Voice application, drawing ire from developers and users alike.

Despite those issues, sales of Apple’s devices remain strong.

“We’re still in the Apple-can-do-no-wrong phase in consumers’ minds,” said Hapoalim Securities analyst Kevin Hunt. He added that as Apple’s profile and market share continue to grow, so will the threat of security breaches.

The latest problem raises questions about the security of the App Store. Long seen as a secure platform for transactions, Apple has gotten users to open more than 100 million accounts, many of which are linked to a credit card.

Some analysts say Apple’s approach ensures safety because all apps need to be vetted.

“If the program doesn’t go through the App Store,” said Gartner security analyst John Pescatore, “it doesn’t get on the iPhone.”

The high-profile breach is the latest in a string of security issues surrounding Apple. Its two newest products, the iPhone 4 and iPad, have also been at the center of security breaches the last  few weeks.

In one case, hackers were able to obtain the e-mail addresses of 114,000 iPad owners from exclusive U.S. carrier partner AT&T Inc.’s website. In another, a deluge of customers trying to order the iPhone 4 were mistakenly given access to other customer’s data, including parts of credit card numbers.

Apple spokeswoman Trudy Muller said developers do not receive confidential customer data when an app is downloaded. She recommended that affected customers contact their financial institutions, as well as change their iTunes account passwords.

Shares of Apple traded Tuesday afternoon at $247.50, up 36 cents.

Read more about the topics in this post: , ,

Companies in this article


Read more about this company »


Read more about this company »

Comments are closed.