However, the settlement excludes more significant App Store changes that were sought by some outside developers
Apple settled a class action lawsuit with U.S. app developers Thursday without agreeing to major changes to its policies.
The settlement will include $100 million worth of payments to app makers ranging from $250 to $30,000 per developer, according to law firm Hagens Berman, which represented plaintiffs claiming Apple overcharged them fees for distributing their programs through the iOS App Store. A new advertising policy, meanwhile, will make it easier for developers to promote alternative pricing plans and ways to pay, without Apple taking a cut.
Apple has long allowed developers to advertise external payment methods but has frowned upon the practice. The new policy ensures Apple won’t ban developers for these communications. It doesn’t, however, let developers advertise outside pricing or payment methods within the apps themselves. The settlement also addresses only U.S. app developers, leaving Apple’s global position unchanged.
The company is clarifying that developers can use communications, such as email, to share information about payment methods outside of their iOS app, Apple said in a statement.
Critically for Apple, the settlement excludes more significant App Store changes that were sought by some outside developers and legislators. The company is still requiring developers to sell their apps — as well as in-app items and subscriptions — using Apple’s payment system, which takes between 15% and 30% in commissions. Apple reduced the cut to 15% for developers that generate $1 million or less annually last year. On Thursday, it committed to continuing that policy for the next three years.
The settlement also doesn’t require Apple to allow third-party app stores or the so-called sideloading of software. And the company doesn’t have to further reduce its revenue share. The accord will require approval from Judge Yvonne Gonzalez Rogers, who is overseeing this lawsuit.
This offer does nothing to address the structural, foundational problems facing all developers, large and small, undermining innovation and competition in the app ecosystem, Meghan DiMuzio, executive director of the Washington-based Coalition for App Fairness, wrote in response. Allowing developers to communicate with their customers about lower prices outside of their apps is not a concession and further highlights Apple’s total control over the app marketplace.
With Thursday’s agreement, Apple said it would retain recent changes to the App Store search engine for the next three years.
At the request of developers, Apple has agreed that its Search results will continue to be based on objective characteristics like downloads, star ratings, text relevance and user behaviour signals, Apple said.