Dong Lee, MJIL Managing Editor

Dong Lee PhotoThe app market is young and booming. Successful apps such as Clash of Clans can rake in over $1,000,000 in revenue per day. Smaller apps such as Gravity Battle, which is presumed to be run by a few individuals in China, can still be profitable and rake in an estimated $18,500 per day. While the market is booming, there are barely any regulations protecting the individuals who spend money on these apps. A typical in-app consumer on an iOS platform makes their purchase through Apple. Apple acts as a sort of middleman who takes the consumer’s money and pays the developer. If there is an issue with the item that was purchased, then the consumer must contact the developer to sort out the issue. However, there are many issues that may arise when trying to contact a developer. Examples of potential issues include: developers simply not responding, developers failing to adequately remedy the situation, and being unable to actually contact the developer.

If a consumer cannot resolve the issue with the developer, then Apple does have a limited refund policy that might be able to provide the consumer with a refund, but the refund policy is limited to a few instances and cannot be used again once exhausted. Unfortunately, if a consumer has utilized the refund policy the maximum amount of times, then the consumer is left with no other remedies. Therefore, in situations where a consumer cannot utilize the refund policy and has not received an in-app purchase, or is unable to access/use the in-app purchase, the consumer is left with no other option but to seek legal action.

However, requiring consumers to seek legal action is unreasonable and most consumers do not spend enough in the app market to justify litigation. Further, the global scale of the app market makes it even more difficult to seek legal action. For example, while the developers of Gravity Battle are presumed to be in China, it is not clear where in China the developers are located and how they may be contacted or served. Therefore, any consumer seeking legal action would have to hunt down the developers and any non-residents of China would be forced to try to litigate in a foreign nation.

Apple has procedures in place to protect copyright owners from app developers that infringe on their intellectual property. However, Apple does not provide any real protections to the consumers who make purchases through them. A solution that address the global scale of the app market and the limited funds involved in in-app transactions would be the equivalent of an international small claims court. A more realistic and consumer friendly solution would be imposing regulations on those who act as the middle man between consumers and app developers.