Apple changes a major rule in the App Store
Apple agreed to ease App Store restrictions for small developers and
settled a class-action lawsuit while the iPhone maker awaits a ruling from
the same judge in a separate App Store dispute brought by the developer of
the game Fortnite.
The settlement includes changes to how all developers communicate with
customers, an issue the judge herself highlighted in the Fortnite case.
The company has maintained the vast majority of business practices in the
App Store that have been challenged in courts and legislatures.
It instead gave away $100 million, a small sum for a company worth more than
$2.4 trillion. It has also waived a host of email marketing restrictions.
Which legal experts said could be hard to defend even given a previous US
Supreme Court case that allowed companies to ban their business partners
from directing customers to alternative payment methods.
A group of small software developers filed the lawsuit in 2019. Alleging
that the company violated antitrust laws with practices such as charging
commissions of up to 30 percent.
The California-based Cupertino Corporation said it had reached a proposed
settlement covering US developers who made $1 million a year or less, under
which the developers drop all claims that commissions were too high.
The new proposed settlement needs the approval of Judge Yvonne Gonzalez
Rogers of the US District Court for the Northern District of California, who
is expected to rule on the Epic Games case.
Apple changes a major rule in the App Store
As part of the settlement, the company said it is making changes to the App
Store. Including an extension of a three-year change made last year that
cuts commissions for smaller developers to 15 percent.
Developers have always been able to take other ways to pay outside of their
apps to avoid company commissions. Some companies, such as Netflix, are
avoiding Apple's in-app payment system.
But the iPhone maker maintains strict rules against developers who use
contact information from customers who have signed up via the App Store to
later tell those customers about alternative payment methods. which are
often cheaper because they do not require commission.
Smaller developers have long objected that the company's restrictions
prevented them from establishing direct billing relationships with
customers.
During an Epic Games trial in May, the judge criticized Apple's rules. And
that's even though Epic Games hasn't made it central to its cause.
"It appears that Apple's concealment of this information in a way that does
not directly reflect on the consumer is uncompetitive," the judge said.
The changes apply to all developers globally, not just the category of
smaller developers in the United States directly covered by the settlement.
The company is also creating a $100 million aid fund for small developers.