Some apps claimed fake functionality or otherwise misrepresented itself

Microsoft Corp.'s (MSFT) app store has about a fourth as many apps as Google Inc.'s (GOOG) Play Store (~1.3 million apps) and Apple, Inc.'s (AAPL) App Store (~1.2 million apps).  But with it reaching 300,000 apps earlier this month, the Windows Phone Store can take pride in that it has many of the most popular apps on its competitors' platforms and even some nice exclusives.
But Microsoft also has faced a new challenge, of a growing number of misleading apps, which range from apps that don't work as intended due to bugs, to free fake apps (possibly a joke, in some cases), to outright fraud/misrepresentation for profit.  Microsoft had long screened for malicious or clearly pirated apps, tracking closer to Google in allowing virtually anything else -- even apps which made deceptive functionality claims but weren't overtly malicious.
However, after reportedly getting complaints from some customers, Microsoft announced that it's borrowing a page from Apple's book and will remove misleading/fake apps, and reject new submissions that fall into this category.  The initial purge claimed over 1,500 such apps.  Add in the ~170,000 apps that the Windows Store currently has and that works out to a little more than roughly 1 in every 300 apps in the Windows and Windows Phone Stores.

[Image Source: Microsoft]

Under its new policies, new and old apps alike but obey three fundamental commandments:
  • Naming: The app cannot mimic other popular apps/services or be named in such a way as to mislead users of its capabilities.
  • Icons: The app cannot mimic the icons of other popular apps or well known companies.
  • Categories: The app must be assigned to a category that fits with its actual functionality.
This will certainly require more work on Microsoft's part and there's certainly the risk of false positives or overreach.  But for the average consumer this should mean less frustration at apps that look like one thing, then turn out to be something else altogether.  Developers can dig into the finer details of the rules changes on Microsoft Windows Store app certification requirements page.

Microsoft points out that the app removals, while relatively large in number, came only after the app publishers refused to comply with Microsoft's warnings and request for changes for months.  It writes:

Most of the developers behind apps that are found to violate our policies have good intentions and agree to make the necessary changes when notified. Others have been less receptive, causing us to remove more than 1,500 apps as part of this review so far (as always we will gladly refund the cost of an app that is downloaded as a result of an erroneous title or description).

It also adds that the process of rescreening older apps is still being perfected and is ongoing, which means more removals could be incoming.  It writes:

The Store review is ongoing and we recognize that we have more work to do, but we’re on it. We’re applying additional resources to speed up the review process and identify more problem apps faster. No approach is perfect, so we encourage people to report any issues they may encounter with Windows Store. For most issues, customers can use the “report concern to Microsoft” link in the Store. For infringements concerns, people can use our online tools or email directly.

We remain as committed as ever to delivering a great customer experience AND expanding the developer opportunity through fair and transparent policies.

Microsoft still remains accepting of certain app categories such as religious or political satire than Apple.  However, in other ways it's also tracked like Apple in the past -- in particular in censoring adult content apps early in the history of Windows Phone.

Source: Microsoft Windows [blog]

"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA

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