Apple Chastised For Doing Business With Blacklisted App Developer, Must Pay $467K

Settling allegations that Apple violated US laws by doing business with a blacklisted app developer for more than a couple of years will cost the tech giant $467,000. WSJ recently reports that the Cupertino company voluntarily revealed the Apple App Store inadvertently violated sanctions for hosting, selling, and facilitating the transfer of apps made by a US-blacklisted Slovenian software company. The US Office of Foreign Assets Control (OFAC) was reportedly pleased that Apple disclosed the violation as soon as it realized what it had done.

We discovered that the company has inadvertently paid an app developer on the US Treasury Specially Designated Nationals, revealed an Apple spokesman. It was reported to the authorities, and the company fully cooperated with the investigation, which has now concluded, the spokesman added. SIS d.o.o. is the name of the company that Apple reportedly entered into an app development agreement in 2008.

The US’ Office of Foreign Assets Control blacklisted the company as well as its majority owner Savo Stjepanovic in Feb. 2015. During the time of blacklisting, the Slovenian company is facing allegations of being a part of an international steroid trafficking network. In May 2017, SIS d.o.o was removed from the said blacklist.

The Cupertino tech giant allegedly made 47 payments associated with the blocked apps of the company while SIS was on the US blacklist. Apple reportedly collected $1.2 million from users who downloaded the apps. Apple’s sanction-screening tool was not able to identify SIS as a blacklisted company since its system listed the company as SIS DOO instead of SIS d.o.o., according to the Wall Street Journal.

Additionally, the Cupertino tech giant’s system failed to identify Mr. Stjepanovic as a blacklisted personality. At that time, Apple was not screening all individual users linked with an App Store account as per agreement. Allegedly, Apple assisted the transfer of ownership of SIS’ apps to a couple of other companies a few months after the designation, OFAC revealed.

Apple is now obligated to pay a $467,000 fine, which is a small drop in its pocket, considering that it is currently valued at $1 trillion. The settlement is just a slap on the wrist.