The EU has recently intensified its pursuit of Apple’s anticompetitive practices from various angles. In recent memory alone, there have been cases involving Apple’s proprietary adapters, including USB wall adapters bundled with phones, default application settings, in-app payments, and more. With the release of iOS 17.4 this month, developers in the EU will gain the ability to establish their own app stores for users to download apps from.
While there are certainly valid arguments in the EU cases and judgments against Apple, one aspect that seems to be downplayed by tech-savvy individuals is the safety provided by the App Store for the average consumer. Although instances of malware and inauthentic apps making their way into the Apple App Store do occur, they are relatively rare given the scale of the store. The average consumer will be much more susceptible to scams and malware when downloading apps from third-party app stores.
Evidence of this vulnerability can be seen in recent reports on ‘pig butchering’ crypto scams primarily originating from Southeast Asia and targeting consumers in the US and EU. In a study released in February 2024, researchers connected over $75 billion to pig butchering scams over a four-year period. There is considerable debate over this figure, with some arguing it is understated due to reliance on self-reported victim data, while critics of the study claim it is overstated due to methodological flaws. Regardless of the exact number, it is evident that this is a scam involving substantial sums of money, as indicated by individuals caught moving tens to hundreds of millions of dollars.
One primary method employed by these scams is persuading victims to sideload apps from sources outside of Apple and Google’s official app stores. As detailed in an upcoming book by Zeke Faux, an investigative reporter from Bloomberg, scammers would prompt individuals to sideload an app called ZBXS. They would then instruct them to transfer cryptocurrency purchased from legitimate exchanges, such as Crypto.com or TrustWallet, into a wallet in the ZBXS investing app.
Currently, it is somewhat challenging for the average consumer to sideload an app onto an iPhone. However, if third-party app stores become readily available and normalized, the safety provided by the walled garden of the App Store will be compromised. While it is important to hold companies accountable for their anticompetitive practices, we must also consider how to leverage technology to protect vulnerable individuals. Despite increased awareness, gift card scams continue to thrive.
Fortunately, there are currently significant barriers to qualify for this program, including two years of Apple Developer Program membership and over one million app installs on iOS in the EU in the previous year. Nevertheless, there is little doubt that scammers will endeavor to find ways to bypass these requirements.