Apple Avoids Another Legal Battle With App Developers

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Apple, in a legal settlement announced Thursday with a group of app developers, said it would allow developers to urge 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 about its control over mobile apps, including strict policies designed to force developers to pay it. part of their sales.

The settlement appears to be a small price to pay for the world’s richest company to avoid another protracted legal battle that could have posed major risks to its business by targeting the iPhone App Store. In practice, some large companies, like Spotify, are already pushing their customers to avoid Apple’s commissions.

Apple is still awaiting a federal judge’s ruling in a separate lawsuit filed by Epic Games, the maker of the popular game Fortnite, which seeks to force Apple to allow app developers to avoid the commissions altogether. App Store. Consumers have also sued Apple over its app commissions, in a case the U.S. Supreme Court has cleared to go to federal court and is seeking class action status.

As part of the new regulation, Apple also said it would create a $ 100 million fund for small app developer payments and agreed not to increase the commission rate for small developers it has. reduced last year to 15% from 30%, for at least three years. .

In a briefing with reporters, an Apple executive said it was a major concession for Apple to allow developers to notify customers, through email and other channels, of alternative payment methods. . Apple will still ban developers from telling customers in their iPhone apps other ways to pay.

The Apple executive added that Thursday’s settlement showed developers of small apps generally agreed to maintain current App Store policies, including the reduced commission. The big developers, who pay the highest rate, continue to complain, however.

Apple has banned reporters from naming or quoting the Apple executive directly.

Some companies are already pushing customers to other payment methods. Spotify, for example, has long blocked customers from subscribing to its music service in its app – and it sometimes advertised it. Apple’s decision on Thursday appears to remove a rule it already selectively enforced.

Steve Berman, an attorney for the plaintiffs in the lawsuit, who sought class action status, said: “We are truly proud that a case brought by two developers, in place of tens of thousands of US iOS developers, can help make so many important changes.

The Coalition for App Fairness, a group of companies fighting to change Apple’s policies on the App Store, said in a statement the deal was a “sham settlement” designed to appease courts, regulators and legislators.

“This offering does nothing to solve the structural and fundamental issues facing all developers, large and small, which undermines innovation and competition in the application ecosystem,” said the group, which includes Epic Games, Spotify and Match Group. “Allowing developers to communicate with their customers on lower prices outside of their apps is no concession and demonstrates Apple’s total control in the app market. “

In the settlement, Apple also agreed to publish an annual report on how many apps it rejects or removes from its App Store, along with data on its search results. The New York Times reported in 2019 that Apple favored its own apps over rivals in search results. Apple has agreed in the regulations to ensure that its search results “will continue to be based on objective characteristics” for at least three years.

The settlement is subject to the approval of Judge Yvonne Gonzalez Rogers of the United States District Court for the Northern District of California, the same judge who presides over the Epic Games and consumer lawsuits against Apple.

Developers who earned less than $ 1 million per year in the App Store from June 2015 to April 2021 are eligible for payments of between $ 250 and $ 30,000 each from the $ 100 million fund offered by Apple, according to lawyers for the plaintiffs.

Separately, on Thursday, Apple said it would also allow news agencies to pay the reduced 15% commission on subscriptions sold through their iPhone apps, but only if they participate in Apple’s news service, Apple. News. The Times and other news outlets have pulled out of Apple News in recent years because they say it has taken over their relationships with readers and potential subscribers.


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