Apple said incentivized app downloads were driving inaccurate rankings in the App Store. In other words, it's now much harder to buy yourself popularity on the App Store. "Incentivized download offer usually say something like "Install one of these apps, and you'll get ten free gold coins!", giving you a chance to acquire whatever virtual goods or currency you're after without having to shell over real cash."
Developers who submit applications with these offer walls are having their applications rejected, on the grounds that they are violating section 3.10 of the developer guidelines (printed below).
So how exactly did it work? "Say you're playing a game that offers you virtual currency; the game might ask you to download an advertised application in exchange for virtual credits within that game. You install the app and get your in-game currency. The app gets a new install and pays for that. This quickly generates bursts of installs, immediately boosting an app's ranking in the app store."
Apple's clampdown is a big deal because incentivized downloads have become a big business, and plenty of big-name iOS developers have integrated incentivized downloads into their applications, including Tapulous (maker of Tap Tap Revenge), Groupon, Playdom, and Pinger (which has a massively successful free texting/voice app). Tapjoy just raised $21 million, and there's little doubt the success of their system played a big part in that.
Here's Tapjoy's statement: