Apple is making a deal with the App Store with small developers while awaiting Fortnite’s ruling

August 26 (Reuters) – Apple Inc. (AAPL.O) agreed on Thursday to remove restrictions from the App Store on small developers, reaching an agreement in a class action lawsuit as the iPhone maker awaits a resolution of the same judge in an independent App Store dispute filed by the developer behind “Fortnite”.

The agreement includes changes in the way all developers can communicate with customers, a problem highlighted by the same judge in the Fortnite case.

But Apple kept intact the vast majority of App Store business practices that have been challenged in the courts and legislatures. Instead, he gave up just $ 100 million, a small sum for a company worth more than $ 2.4 trillion and a set of email marketing restrictions that legal experts had said could be difficult. of advocating even in a previous U.S. Supreme Court case that allows companies to ban their business partners from orienting customers toward alternative payment methods.

A group of smaller software developers filed the lawsuit in 2019 alleging that Apple violated antitrust laws with practices such as charging commissions of up to 30%. The Cupertino, California-based company said it has reached a proposed agreement that covers U.S. developers earning $ 1 million a year or less, under which developers post all claims that commissions of Apple were too high.

Apple awaits a decision in the much more profiled antitrust case filed by Fortnite creator Epic Games. The proposed settlement Thursday will need the approval of Judge Yvonne Gonzalez Rogers, of the U.S. District Court for the Northern District of California, who is expected to give a ruling in the Epic case.

As part of Thursday’s deal, Apple said it will make changes to the App Store, including extending for three years a change made last year that reduces smaller developer commissions to 15%.

Developers have been able to take other forms of payment out of their apps to avoid commissions from Apple and some, like Netflix Inc. (NFLX.O), shun Apple’s built-in payment system.

But Apple maintains strict rules against developers who use contact information obtained from customers who sign up through the App Store to inform them later about alternative payment methods, which are often priced lower because they do not require commissions to Apple.

Smaller developers without Netflix name recognition have long objected that Apple’s restrictions prevented them from establishing direct billing relationships with customers.

During the May Epic-Apple trial, González Rogers had criticized Apple’s rules, although Epic had not made them a central piece of his case.

“The fact that Apple hides this information in a way that is not directly reflected to the consumer seems to be anti-competitive,” he said.

Apple said the changes will apply to all developers around the world, not just the class of smaller U.S. developers covered directly by the deal. The company will also create a $ 100 million support fund for small developers.

Steve Berman, managing partner of Hagens Berman, who represented the developers of the case, said the deal would bring “significant improvements.”

Reports by Aishwarya Nair and Kanishka Singh in Bengaluru and Stephen Nellis in San Francisco; Edited by Shri Navaratnam and Leslie Adler

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