Digital Rights Group Blasts iPhone's Faustian Developer Deal

Want to make an app for that? You better be prepared to sign one of the tougher contracts this side of Faust.

Apple's developer agreement -- recently unearthed by the Electronic Frontier Foundation --  severely limits the company's liability and enables them to kill any application.

Details on the developer agreement have been scant until now, because it includes a strict confidentiality clause. But the EFF filed a Freedom of Information Act Request with NASA, which has its own iPhone app. EFF's conclusions:

Overall, the Agreement is a very one-sided contract, favoring Apple at every turn. That's not unusual where end-user license agreements are concerned (and not all the terms may ultimately be enforceable), but it's a bit of a surprise as applied to the more than 100,000 developers for the iPhone, including many large public companies. How can Apple get away with it? Because it is the sole gateway to the more than 40 million iPhones that have been sold. In other words, it's only because Apple still "owns" the customer, long after each iPhone (and soon, iPad) is sold, that it is able to push these contractual terms on the entire universe of software developers for the platform.

The agreement's release is especially interesting as it comes amid what Gizmodo aptly calls "The Great App Store Purge of 2010." It began in February when Apple began removing some, but not all, sex-themed applications from its online App Store. The company then started killing apps that scan for nearby wireless networks. This week, Apple set its sights on "cookie-cutter applications," which offer little more functionality than a simple Web site.

The license agreement must be signed by developers of applications for the iPhone operating system, which runs on the iPhone, iPod Touch and iPad.

So what's in the agreement? For a start, Apple reserves the right to suddenly kill any application -- even after you've purchased it. "Steve Jobs has confirmed that Apple can remotely disable apps, even after they have been installed by users," wrote EFF staff attorney Fred von Lohmann. "This contract provision would appear to allow that." The contract also strictly bans tinkering with any Apple products, a limitation that Lohmann points out could prevent developers from making apps that work with open source software.

But one of the most audacious clauses is the one that limits Apple's liability:

Section 14 states that, no matter what, Apple will never be liable to any developer for more than $50 in damages. That's pretty remarkable, considering that Apple holds a developer's reputational and commercial value in its hands--it's not as though the developer can reach its existing customers anywhere else. So if Apple botches an update, accidentally kills your app, or leaks your entire customer list to a competitor, the Agreement tries to cap you at the cost of a nice dinner for one in Cupertino.

As frustrating as the agreement might be for developers, they always could just opt out, as some of the tech-savvy commenters at Slashdot point out. And at least one spurned developer has embraced the underground app store Cydia, which can only be accessed on devices that have been jailbroken, a process that allows users to run unauthorized software. But that's a limiting option since only 8.5 percent of devices are jailbroken, according to Cydia's creator.

Check out the EFF-hosted 28-page agreement for yourself.