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China App Store employees fired over relationships with developers

As per an internal probe, Apple terminated at least five employees in its China App Store due to business misconduct, including unauthorized interactions with mobile game developers.

The investigation, initiated after an internal audit uncovered irregularities in 2022, concluded in the middle of the subsequent year. It involved multiple employees from the China app store division, a highly profitable sector for Apple, particularly due to its revenue from mobile games.

Apple CEO Tim Cook's visit to China coincided with these developments, where he lauded Chinese app developers and attended a mobile games tournament hosted by Tencent.

The employees under scrutiny during the investigations served across various departments responsible for app approval, revenue guidance for developers, and selecting apps to feature prominently on the App Store's home pages. These placements significantly influence the success of an app.

One aspect of the probes involved unsanctioned contact between these employees, game developers, and their consultants, as learned by The Information. These interactions included accepting complimentary meals and nightclub outings from these external parties, according to a source familiar with the situation.

While Apple refrained from providing specific comments on the allegations, they emphasized their expectation that employees worldwide adhere to their strong ethics and business conduct policies. Apple reiterated its commitment to thoroughly investigating reports of improper conduct and taking appropriate action, including termination.

Apple's App Store division has faced questions about the influence of its editorial team in selecting featured apps. The team collaborates with business managers and prominent developers, while reviewers can approve or reject apps based on Apple's guidelines.

This process can often involve subjectivity, creating frustrations for developers. Furthermore, employees in developer relations play a crucial role in promoting tools and technologies to app developers and acting as a point of contact when developers encounter issues securing Apple's approval for their apps or updates.

Apple maintains strict rules regarding contact with developers. Employees in app review and editorial roles are required to seek prior approval for meetings with developers. In contrast, employees in developer relations and business management can meet with developers but must avoid accepting expensive gifts or meals.

Apple's internal investigation found that the terminated employees did not have direct authority over app approval in the Chinese App Store. However, some had positions that may have influenced featured apps, and their unsanctioned contacts remain unclear.

Apple's investigations into its China App Store coincide with increasing global regulatory scrutiny of its App Store operations. The U.S. Department of Justice was reportedly preparing a potential lawsuit against Apple, seeking insights into how the company maintains strict control over the iPhone, including the App Store.

The Digital Markets Act passed by the EU requires gatekeepers like Apple to ensure equal access to their operating systems. This would allow developers to distribute apps through alternative means in European countries, potentially affecting Apple's commissions.