Yeah, I really do not like the fact they rejected an app based on a clause in the terms and conditions, which you have to agree to in order to submit an app to begin with
EDIT:
Quote: " Yes, we spoke to the Sr. Partnership Manager, iPod & iPhone, Apple Europe in the UK, who concluded that we were okay with our approach and that Apple was actually interested in our concept"
One thing I've learnt from being around corporate-types, is that "We're interested" means "We want a contract" or "We want to take control of this project ourselves".
Also, being "OK with the approach" doesn't mean "continue to breach our terms and conditions" - without seeing how they worded their questions/emails, you can't know whether Apple is actually in the wrong here. Unless they explicitly stated the app emulated/used ROMs, the Snr. guy probably had no reason to expect it (he probably knows zilch about C64 and actual apps etc. - he's a big cheese), and the "approach" they were OK with was probably related to the downloadable content they mention later
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