Japanese Game Publisher 'Digital Will' has filed a 5-Count Lawsuit against Apple for Intentional Interference with Contractual Relations & more
Digital Will is a Japanese headquartered software solution developer, digital marketing agency, game publisher, and product innovation lab. Digital Will develops, among other things, digital games and apps, and provides software maintenance, consulting, and their support services. The company has filed a 5-count lawsuit against Apple:
- Count 1: Breach of Implied Covenant of Good Faith and Fair Dealing.
- Count 2: Intentional Interference with Contractual Relations
- Count 3: Intentional Interference with Prospective Economic Advantage
- Count 4: Negligent Interference with Prospective with Prospective Economic Advantage
- Count 5: Violations of Cal. Bus. & Prof. Code § 17200, ET SEQ.
Plaintiff is a small business with only six employees, and its revenue and livelihood largely depend on its ability to distribute its digital products through Apple’s App Store.
To that end, Digital Will maintained an Apple Developer Program (“ADP”) membership Apple Team ID F2FJ2K8N39) that was memorialized through a written Apple Developer Program License Agreement (“DPLA”) between Apple and Digital Will. The ADP membership allowed Plaintiff to distribute and promote its software products (namely, its games and apps) to end users through the Apple App Store.
On or about March 26, 2022, without warning and to Plaintiff’s surprise, Plaintiff received a boilerplate message from Apple’s App Store Review stating that Apple determined that Digital Will’s ADP membership “has been used for dishonest or fraudulent activity,” and thus, Plaintiff’s ADP account was “flagged for removal.”
The boilerplate message stated that Apple found that Digital Will’s ADP account was allegedly “associated with terminated developer accounts, or accounts pending termination, in direct violation of the Apple Developer Program License Agreement.”
Critically, Apple’s message to Digital Will did not identify any such accounts that were terminated or pending termination with which Digital Will’s account was allegedly associated.
In fact, Apple’s message did not identify any specific facts whatsoever, or any particular misconduct in which Digital Will engaged that violated the DPLA.
The message further stated that Digital Will could appeal this determination within 14 days so long as it provides a written statement that thoroughly explains the issues Apple identified, the specific steps Plaintiff will take to resolve them, and any new information clarifying the issues.
However, it was impossible for Digital Will to appeal and respond to “the issues [Apple] identified,” when Apple had not identified any specific issues.
Notably, and importantly, Plaintiff’s ADP membership has never been used for dishonest or fraudulent activity.
This was essentially the same message Apple sent Plaintiff on March 26, 2022.
The message further stated that Apple’s “appeal decision is final” and that “any subsequent appeals [Plaintiff] file[s] will be closed without review.”
The message even went so far as to state that Apple “found a pattern of manipulative or misleading behavior that has led to the termination of [Digital Will’s] Apple Developer Program membership.”
Again, Apple’s apparently automated message was keen to levy serious allegations of misconduct and moral turpitude against Digital Will without providing any facts, examples, or details whatsoever.
On or about April 5, 2022, after becoming even more deeply concerned about the matter, Mr. Bohn, on behalf of Digital Wall, called Apple Japan Developer Support, and spoke with an Apple representative, who advised him that she could not do anything, but would forward his inquiry to the correct Apple personnel and that they would respond to him further.
On or about April 7, 2022, in response to Mr. Bohn’s phone call to Apple Japan Developer Support, Digital Will received a two-sentence response from the Apple Developer Program Team advising Plaintiff that, because Digital Will already submitted a “termination appeal,” Apple’s “termination decision is final” and Plaintiff’s appeal would not be processed.
In reality, Apple improperly and unilaterally deemed Plaintiff’s requests for even a scintilla of information regarding the vague and baseless accusations—so Plaintiff could understand and intelligently respond to them—to be a “termination appeal.”
In other words, Apple failed to provide Plaintiff with any facts or details to support its unilateral termination of Plaintiff’s ADP membership, and then stripped Plaintiff of any meaningful opportunity to appeal Apple’s arbitrary and highly damaging termination of Plaintiff.
Ultimately, on April 16, 2022, Apple emailed Plaintiff a notice of termination letter in which Apple notified Plaintiff that Apple had terminated the DPLA with Plaintiff, and again, made generic references to “dishonest and fraudulent acts relating to [the] agreement,” without any specifics relating to the improper conduct.
Apple’s termination notice simply states, “Apple has good reason to believe” that Digital Will violated the terms of the DPLA.
Apple has no evidence that Plaintiff violated the terms of the DPLA.
Apple is a dominant and controlling player in the mobile app industry. It currently has 1.8 million apps available and distributes more than 4 billion apps each day.
Many companies and software developers, like Plaintiff, rely on Apple’s App Store to operate their businesses and make a living.
There is no question that Apple’s flagrant and inappropriate termination of Digital Will’s ADP membership would, and did, have a devastating effect on Digital Will.
Digital Will is a small company. Its founder’s wife was pregnant with their first child while Plaintiff was dealing with this dispute. The losses Digital Will has sustained as a resultof Apple’s misconduct had a significant impact on its ability to pay its six employees and survive.
On or about June 3, 2022, Plaintiff retained counsel to send a letter to Apple demanding, among other things, that Apple reinstate Plaintiff’s ADP membership and compensate Plaintiff for its reasonable economic losses and attorneys’ fees incurred for this matter.
On or about August 23, 2022—over two months after Digital Will engaged counsel to send a letter to Apple—Apple reinstated Digital Will’s ADP membership without providing any explanation or details to support its termination of Plaintiff in the first instance, or compensation to reimburse Plaintiff for its losses Apple caused.
Apple’s act of reinstating Plaintiff acknowledges that Apple terminated Digital Will’s ADP membership without justification.
By the time that Apple finally reinstated Digital Will’s ADP membership, Digital Will had already sustained significant damages.
The harm Apple causes Plaintiff could have been avoided if Apple simply communicated with Plaintiff before unilaterally and improperly terminating its account.
As a result of Apple’s abrupt and unjustified termination of Plaintiff’s ADP account, Plaintiff’s revenue from game sales went to zero for at least five months.
To stay in business and remain relevant in the marketplace, Digital Will was forced to transfer its games and apps to other publishers, which resulted in Digital Will incurring significant additional costs and damage to its reputation. It further resulted in Digital Will losing app development revenue, losing its best customer, preventing it from developing for Mac and iOS, and being forced to retain counsel and needlessly incur legal fees and costs to resolve this issue with Apple.
Apple’s false accusations caused Digital Will’s preexisting clients, partners, and contractors, who relied on the false statements, to lose trust in Digital Will and revoke their business. It created the appearance that Digital Will engaged in some unidentified impropriety.
Apple’s conduct caused Digital Will’s partners to lose trust in Digital Will, several of which ceased consulting with Digital Will on iOS app development. As a direct and proximate cause of Apple’s actions and omissions described herein, Plaintiff has sustained damages in an amount of not less than USD $765,000 to be determined at trial.