Apple agrees to App Store changes to settle developer lawsuit

Apple pays $100 million, agrees to App Store changes to settle dev lawsuit

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App Store
But do the changes go far enough?
Photo: James Yarema/Unsplash CC

Apple will make several changes to its App Store policies to settle a class-action lawsuit brought by developers, the company said Thursday. Cupertino also will cough up $100 million to create a “fund” for small app-makers.

As part of the deal, Apple will allow developers to inform customers about alternative payment methods outside of their iOS apps. But they won’t be able to mention those payment methods inside the apps themselves.

The App Store changes come as Apple and other tech giants face international scrutiny from antitrust regulators looking to reign in the companies’ enormous influence.

The class-action lawsuit, filed by a group of developers in June 2019, accused the company of using its App Store monopoly to impose “profit-killing” commissions. It focused on the 30% cut Apple took from all App Store sales at the time. Since then, Apple introduced the Small Business Program, which reduces the company’s take to only 15% of small developers’ app revenues.

The company confirmed in a press release Thursday that further App Store changes will follow as part of a settlement. The tweaks are an attempt to appease app and game creators angry about Apple’s policies. Still, many likely will argue that the changes Apple announced don’t go far enough.

Apple confirms App Store changes

“Following a productive dialogue, Apple and the plaintiffs in the Cameron et al v. Apple Inc. developer suit reached an agreement that identifies seven key priorities shared by Apple and small developers,” reads Apple’s announcement.

The seven priorities include maintaining the Small Business Program in its current structure for at least the next three years. Plus, App Store search results will continue to be based on objective characteristics — like downloads, ratings and relevance — for the same period.

“Apple is also clarifying that developers can use communications, such as email, to share information about payment methods outside of their iOS app,” the company said. However, it seems devs won’t be able to mention those payment methods inside their apps.

Apple said it will expand the number of App Store price points for paid apps, in-app purchases and subscriptions. It also will establish a $100 million fund to assist small U.S. developers. (The company promised to provide more details on that at a later date.)

’An economic miracle’

“From the beginning, the App Store has been an economic miracle; it is the safest and most trusted place for users to get apps, and an incredible business opportunity for developers to innovate, thrive, and grow,” said Phil Schiller, the Apple Fellow who oversees the App Store. “We would like to thank the developers who worked with us to reach these agreements in support of the goals of the App Store and to the benefit of all of our users.”

The changes are a step in the right direction. Giving developers the ability to inform customers about payment methods outside of the App Store, in particular, is a significant adjustment to Apple’s strict payment policies.

But many will surely feel that the changes don’t go far enough. For instance, there’s no mention of Apple loosening its often-ridiculous rules on what is and is not allowed on the App Store — like those that block game streaming services.