Apple Inc. will change its App Store policies into a legal agreement, the first major concession the iPhone maker has made amid multiple antitrust investigations.
In a motion to resolve a 2019 class action lawsuit from developers, Apple AAPL,
agreed to allow app makers to direct their consumers to payment options outside the App Store, which could allow them to avoid paying up to 30% of fees Apple charges developers for online purchases on iOS apps. The company also agreed on a democratic approach to the App Store’s search function, greater price freedom, and an annual transparency report on companies ’app review policies and their effects.
Perhaps Apple’s largest grant would allow developers to communicate directly with customers about alternative payment options, with their permission, using the information collected in their apps.
The changes apply to developers around the world, not just small U.S. developers covered by the agreement.
The fees charged to developers and the rules that Apple has applied that require the use of Apple’s payment option in applications without any direction to other payment options, were the focus of an independent lawsuit, Epic Games Inc. . against Apple. This same antitrust case, filed by the creator of the video game “Fortnite”, is decided by the same judge who will now weigh this proposal, with a resolution in the Epic case expected soon.
For more information: Apple’s antitrust fall is already underway
Thursday’s proposed deal is in a case that sought collective action status for small developers (those earning less than a million dollars a year) who felt unfair to Apple. Apple still defended its App Store practices in a legal filing of Donald R. Cameron et al’s lawsuit against Apple.
“Evidence from the registry states that the practices challenged in this and other cases are lawful and justified by business need, including the protection of Apple’s intellectual property and the protection of the security and privacy of customers of Apple, “the documentation says. “However, Apple would rather work with developers than litigate against them.”
Apple also agreed to pay $ 100 million to developers, which it mentioned recently in its announcement about the proposed deal and called “a fund to help small American developers, especially because the world continues to suffer from the effects of COVID -19 “. The plaintiffs’ filing noted that the fund would pay developers $ 250 to $ 30,000 directly, based on previous App Store revenue.
The ruling will be weighed down by Judge Yvonne Gonzalez Rogers, of the U.S. District Court in Oakland, California, who also presided over and decided the Epic antitrust case. A decision in this case is expected soon.
An Apple legal strategist said the class action agreement was a separate issue from the controversial case with Epic and an act of good faith for smaller developers. In November 2020, for example, Apple halved its commission by 15%, from 30% for App Store sales to companies that don’t generate more than $ 1 million in revenue. through the software platform, including in-app purchases.
Epic did not immediately respond to an email asking for comments on the deal. A few hours later, he shared his opinion as a founding member of the Coalition for App Fairness (CAF):
“Apple’s false offer of liquidation is nothing more than a desperate attempt to avoid the trial of courts, regulators and legislators around the world. This offer does nothing to address the structural and fundamental issues facing all developers, small and large, and undermine innovation and competition in the application ecosystem, “the executive director of CAF, Meghan DiMuzio. “Allowing developers to communicate with their customers about lower prices outside of their apps is not a concession and highlights Apple’s full control over the app market.”
Another group of developers, however, praised Apple. “The actions announced today by Apple will help strengthen the app ecosystem and support the thousands of developers who make a living from mobile apps,” said Apps Association President Morgan Reed. in a statement.
At least one antitrust expert rejected the deal as an extension of the status quo. “Class attorneys appear to be receiving a $ 30 million check for working on Apple’s public relations,” Matt Stoller, research director of the American Economic Liberties Project, told MarketWatch. “I don’t see anything here that restricts Apple in a significant way.”