Apple Conflict of Interest: Manager Competes with iPhone and iPad Developers

Last Updated Aug 23, 2010 11:08 AM EDT

It appears that Phillip Shoemaker, Apple's (AAPL) director of applications technology who oversees the App Store, is also an app developer with his own products for the iPhone and iPad. But the nature of his products, coupled with patterns of Apple app approvals and disapprovals, can easily make you wonder if there is a conflict of interest.

A business that wants to resell the work of others must be wary of directly competing with them, or even giving the appearance of doing so. Even if everything is aboveboard, you can irreparably damage your relationship to your vendors and ruin your own reputation among potential partners. I remember having to step carefully around such issues back when I worked in product marketing for a company that was a big reseller of PC development tools and that also carried a specific editor for programmers. We sold competing editors as well and had to avoid the impression of favoritism.

Apple isn't in the app business -- so far, at least -- although it will reject apps that duplicate functions of an iPhone or iPad. But it comes across just as badly that someone so closely involved in the app store does sell apps. It would be similar to the head of logistics for Walmart (WMT) owning a company that also sold to the retailer. Other vendors would assume that the person would have an unfair advantage. There is the very real chance that working in a decision-making position would allow the person to favor his or her own products. However, even if there is no overt favoritism, just having such inside information as how far you could push an acceptable deal, or what product types were in greatest demand, gives an edge.

Shoemaker is one of the two senior people who become involved when an app gets publicity for being unfairly rejected. The rejection process can seem mysterious and completely illogical to app developers, as I and my BNET colleague Damon Brown have mentioned before.

Part of the conditions under which app developers do business is being unsure whether an app will be approved. Eliminate the question and you eliminate a significant risk of investing time and money only to find that Apple will not allow you to bring a product to market. That's the advantage that Shoemaker has. A number of the products indulge heavily in scatological humor: fart apps and a urination simulation app.

Apple has tried to say that Shoemaker had all his apps approved before he started working at the company, but as Brian Chen showed in his Wired article, several of the apps came to market after Shoemaker noted on his Twitter account that he had begun to work at Apple. After the Wired story appeared, Shoemaker apparently tried to eliminate any evidence on his Twitter and LinkedIn accounts of his connection to the company, GrayNoodle, that produces the apps. (As AppleInsider points out, given the review time the app store acceptance process can take, it could be that Shoemaker got the job after submitting the apps but before they were approved.)

Supposedly, someone would have had to sign off on Shoemaker being allowed to continue developing and selling apps while an employee. Didn't anyone at Apple see the potential problem, particularly given Shoemaker's prominence in the app decision making process? Or is this supposed to be another case where Apple does as it will and everyone else is supposed to be grateful that the company pays attention to them at all?

Related: Image: GrayNoodle
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    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.

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