AAPL Apple Inc

By Yoko Kubota 

BEIJING--Under fire from Chinese state media, Apple Inc. said it removed illegal gambling apps from its App Store in China--a move that could help quell the latest challenge for the American tech giant in its most important market outside of the U.S.

"Gambling apps are illegal and not allowed on the App Store in China," Apple said in a statement Monday. "We have already removed many apps and developers for trying to distribute illegal gambling apps on our App Store, and we are vigilant in our efforts to find these and stop them from being on the App Store."

Apple had been criticized by Chinese news outlets for not doing enough to filter banned content and applications. State broadcaster CCTV, which last month reported that Apple's app store allowed illegal gambling apps disguised as official lottery apps, said Sunday that 25,000 apps have been removed.

Apple offers more than 1.8 million apps in China, according to the Ministry of Industry and Information Technology. Apple didn't confirm the number of apps it took down or when it had removed them, but 25,000 would amount to about 1.4% of that total.

Apple occasionally cleans up its App Store in the U.S. as well, removing outdated or spam apps. In China, Apple said it removed nearly 700 virtual private networks, or VPN, apps from its App Store last year in response to new local restrictions. VPN is used by individuals and companies to send secure emails, transmit data and access websites blocked in China.

The state media attacks came at a vulnerable time for Apple, which like other U.S. companies operating in China, is caught in the middle amid growing trade friction between Washington D.C. and Beijing.

U.S. companies are paying close attention to the messages they get from the Chinese government and the state media in this sensitive trade environment, said Ben Cavender, a director at China Market Research Group who focuses on consumer technology and retail.

"They are going to move very quickly to try to rectify that problem, because this is a situation where there could be a lot more backlash in the government in terms of regulations," Mr. Cavender said.

In its latest report on the app housecleaning, CCTV also said that illegal apps that were banned from the App Store would still be working on devices of users who had downloaded them. It also said that fake positive reviews for the illegal apps have misled some users.

"Apple itself has set up the rules on how to allow apps onto its store, but it didn't follow that, resulting in the proliferation of bogus lottery apps and gambling apps," it said in its report.

Apple's strong ties to China leaves it exposed should trade tensions ratchet up. China accounts for about one-fifth of its revenue. The Cupertino, Calif.-based company also assembles its iPhones in China, which means the iPhones are a Chinese export that could potentially be subject to tariffs in the trade row.

Trade experts say China could hurt U.S. companies either through tariffs or other measures, including media-led campaigns against U.S. goods.

Despite concerns, currently American branded goods including Apple's iPhones continue to be popular in China, with Apple's retail stores and many other U.S.-brand stores attracting customers as usual.

The state media criticism against Apple also comes at a time when the Chinese government tightens control over the internet environment, as regulators strive to block news and entertainment content at odds with Communist Party values.

Last month, multiple media including state-controlled news agency Xinhua published criticism of Apple for not doing enough to filter banned content on its iMessage service.

Apple has pointed to tools on iMessage that can help users filter or block spam. Messages sent through the iMessage service are encrypted, which means only the sender and the receiver can access it. The company says it can't decrypt those messages and doesn't log any messaging content.

Analysts have said that since Apple's operating system doesn't allow encrypted messages to be read, its spam filters aren't as effective as Google's Android platform, which allows users to grant access to third parties to read their messages for better spam filtering.

Yang Jie

contributed to this article.

Write to Yoko Kubota at yoko.kubota@wsj.com

(END) Dow Jones Newswires

August 20, 2018 04:10 ET (08:10 GMT)

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