Apple Settlement Gives App Developers a Way to Avoid Its Commission

In a legal settlement announced on Thursday with a group of app developers, Apple announced that it would allow developers to ask customers to pay for them outside of their iPhone apps.

The move would allow app makers to avoid paying Apple a commission on their sales and could appease developers and regulators concerned with controlling mobile apps, including strict guidelines that are supposed to force developers to pay a cut in their sales .

The comparison seems like a small price to pay for the world’s richest company to avoid another lengthy litigation that could have put its business at risk from attacks on the iPhone app store. In practice, some large companies like Spotify are already pushing their customers to bypass Apple’s commissions.

Apple is still awaiting a decision by a federal judge in a separate lawsuit filed by Epic Games, maker of the popular game Fortnite, designed to force Apple to allow app developers to avoid App Store commissions entirely. Consumers have also sued Apple for its app commissions in a case that the US Supreme Court has allowed in federal court, seeking class action status.

As part of the new settlement, Apple also said it would set up a $ 100 million fund to pay off small app developers, and agreed to lower the small developer commission rate, which rose from 30 percent to 15 percent last year Percent was lowered, not to increase for at least three years.

In a briefing with reporters, an Apple executive said it was a huge concession for Apple to allow developers to notify customers of alternative payment methods through email and other channels. Apple will continue to ban developers from informing customers about other payment options in their iPhone apps.

The Apple executive added that Thursday’s settlement showed that small app developers were largely okay with maintaining current App Store policies, including the reduced commission. However, larger developers who pay the higher price continue to complain.

Apple prevented reporters from naming the Apple executive or directly quoting them.

Some companies are already pushing customers to use other payment methods. Spotify, for example, has long prevented customers from signing up for subscriptions to its music service in its app – and has been promoting this at times. Apple’s decision on Thursday appears to override a rule that has already been selectively enforced.

Steve Berman, attorney for plaintiffs in the lawsuit, who moved for class action status, said, “We’re really proud to have a case of two developers replacing tens of thousands of US iOS developers contribute could bring about so many important changes. “

The Coalition for App Fairness, a group of companies campaigning for a change in Apple’s App Store policies, said in a statement that the deal was a “bogus solution” designed to appease courts, regulators and lawmakers.

“This offering does nothing to solve the structural, fundamental problems that all developers, large and small, face that undermine innovation and competition in the app ecosystem,” said the group, which includes Epic Games, Spotify and Match Group belong. “Allowing developers to communicate with their customers about lower prices outside of their apps is not a concession and underscores Apple’s total control over the app marketplace.”

In the settlement, Apple also agreed to publish an annual report on the number of apps it rejects or removed from its app store, as well as data on its search results. The New York Times reported in 2019 that Apple preferred its own apps over its competitors in search results. In the settlement, Apple agreed to ensure that its search results “continue to be based on objective characteristics” for at least three more years.

The settlement requires approval from Judge Yvonne Gonzalez Rogers of the US District Court for the Northern District of California, the same judge who presides over the Epic Games and presides over consumer lawsuits against Apple.

Developers who made less than $ 1 million a year on the App Store from June 2015 to April 2021 are eligible for payouts between $ 250 and $ 30,000 from Apple’s proposed $ 100 million, according to plaintiffs’ attorneys. Dollar fund.

Separately, Apple said Thursday that it would also allow news organizations to pay the reduced 15 percent commission on subscriptions sold through their iPhone apps, but only if they participate in Apple’s news service Apple News. The Times and several other news organizations have pulled out of Apple News in the past few years because, as they say, they have taken control of their relationship with readers and potential subscribers.

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