Does Apple's iPhone App Killing Open It to Liability?

Apple's App Store logoApple has confirmed that it can turn off an application already sitting on a user's iPhone. There's been a fair amount of controversy around kill switches, and I suddenly wondered whether, given the specifics of Apple's operations, whether the company was opening itself up to liability. So I asked Mark McCreary, a partner with law firm Fox Rothschild, about it.

BNET: Because Apple vets applications before letting them onto its iPhone store, is there a potential for liability? Does it effectively put Apple in the position of having authorized the application and the user having made decisions based on that assurance? Mark McCreary: Generally speaking, I am not aware of any prohibition on Apple killing an application that a user has installed on his or her iPhone. First, the action is permitted in the Apple terms and conditions for the iPhone and App Store. Second, there are very compelling reasons for Apple to suddenly take away an application. Apple may receive notice that the application violates some third party's intellectual property rights and may be compelled to "recall" the application. Apple may determine that there is some feature or functionality that is in violation of the Apple App Store terms and conditions and/or the AT&T terms and conditions. Apple may also learn or discover that an app opens the device and/or the AT&T network to a virus or similar risk. Also, Apple may have in mind a feature for enterprise administrators to be able to restrict those applications that its users can run on the iPhone. (Think of the Blackberry admin's ability to restrict [over the air] installations, etc.)

That being said, if there is a risk of exposure to Apple, it most likely arises in connection with refunding a purchase price. While a licensee of an application has no guarantee that the application will be supported, updated or improved, there is an expectation that the application can actually be used. As noted, the Apple terms and conditions for the iPhone and App Store permit Apple to pull back the application, but I could see a judge or jury determining that the licensee is harmed by paying the purchase price and not getting the benefit of the application.

BNET: To what degree might Apple be liable for an application that caused harm? If it is taking the active step to remove what it deems unallowable, has it tacitly accepted a greater responsibility for overseeing the safety of the user and the user's data? MM: Apple almost certainly would have exposure if it knowingly released an application that does harm, but Apple otherwise disclaims its liability and responsibility otherwise.

BNET: What responsibility might Apple have if a hacker was able to use/misuse the iPhone store to make dangerous applications available, or to add a virus or other malware to an existing app? MM: [The same as] above. I believe that this all comes down to what Apple would permit to happen knowing there was a risk and harm. I cannot -- well, should not -- sue Microsoft because a virus penetrates the operating system. It is unreasonable for me to expect to be protected. The same can be said about anti-virus manufacturers, even thought preventing viruses is exactly what they intend to do. None of these software companies promise no harm, and users have no recourse, unless [the vendors] knowingly permit harm.

I believe that there are compelling reasons to have the ability to kill an application. On the other hand, I more than understand consumers' reluctance and irritation over anyone being able to come "into" their device and snatch away an application. It comes down to weighing the risks and benefits, and the never ending discussion of someone else deciding what it best for us. That argument aside, I believe the infringement, network harm risk, and enterprise-level controls are compelling reasons to have the kill switch. Whether consumers agree is another story.

BNET: What if a consumer lost data when Apple turned the application off? MM: I think in about 99 percent of the cases, it comes down to what the terms and conditions permit. With the general risk of data corruption and instability in software, there is no guarantee that data will be protected, maintained and free from loss. There is certainly a more compelling argument that damage is done if data is lost as a result of a kill, but I believe it would still be an uphill battle for the consumer.

BNET: What if Apple decided to kill an application for no specific reason? MM: If Apple killed an app because it just decided one day to kill it, I do not think the prior analysis is any different. Apple reserves the right to do that by building in the functionality into the software, if not explicitly in the terms and conditions. The refund issue becomes much more relevant if there is a no-good-reason kill.

It is important to note that despite the legal strength of Apple's defenses or actions, that certainly does not mean lawsuits will not be filed and/or settlements reached.