Apple agrees to App Store changes letting developers email users about payment options
Independent developers will be allowed to tell iPhone users about ways of avoiding the “Apple Tax” on their apps for the first time, as part of an outof-court settlement concluding a classaction lawsuit against the company.
The agreement, which is accompanied by a $100m payout from Apple to be distributed among App Store developers who have earned less than $1m over the past six years, represents a small but significant concession from the company, whose iron grip over the App Store has earned it billions in profit alongside accusations of unlawful monopolistic behaviour.
“This hard-won settlement will bring meaningful improvements to U.S. iOS developers who distribute their digital wares through the App Store, especially for those small developers who bring so much creativity and energy to their work,” said Steve Berman, one of the lawyers representing the developers.
Other provisions in the wide-ranging agreement include a guarantee that Apple will maintain its “small business programme”, which cuts the App Store commission from 30% to 15% for developers who earn less than $1m a year, for a further three years minimum, and a promise to offer more flexibility on pricing within the App Store.
“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 head of 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 settlement does not address every concern from independent developers. Apps will still be required to offer exclusively in-app payments using Apple’s own system, which charges a cut of between 15 and 30% on every transaction, and they will still be banned from telling users that other payment options may exist elsewhere. Those are the clauses that lie at the heart of Epic Games’ ongoing lawsuit with Apple, which saw its hit Fortnite game pulled from the App Store when the company used its own payment service instead of Apple’s.
But developers will now be able to directly contact users, with contact details received through the app, in order to tell them of other payment possibilities. That means, for instance, that a user who bought a subscription through the App Store could be offered a saving to switch their payment to a credit card – while still boosting the developer’s bottom line.
Richard Czeslawski, one of the app developers who filed the lawsuit that Apple is settling, hailed the freedom to email users as a “game changer” in a declaration field with the court in Oakland, California. App developers “will take full advantage of this change in customer communications as a way to further reduce the commissions paid to Apple”, he said.
The news comes less than a day after Apple announced another concession, this time cutting the commission it charged news publishers. The Apple News Partner Program involves news apps paying a 15% commission on their in-app purchases – but only, the company said, if they also decide to support Apple News, its aggregation service. That program follows on from a similar deal, the Video Partner Program, which was created to encourage companies such as Amazon to support Apple TV.
Regulators across the world have begun looking at ways to foster competition in the Google and Apple app marketplaces. Australian’s competition watchdog is considering regulation of the app stores, including making it easier for people to choose alternative payment options.