Apple will make changes to App Store rules to settle class-action lawsuit

nanoguy

Posts: 972   +14
Staff member
In brief: Apple is trying to avoid some legal headaches by settling a class-action lawsuit related to the App Store for $100 million. Almost all developers are eligible for a share of this payout, and the company has agreed to "clarify" App Store rules, including one where devs will be able to contact users outside the app to promote alternative payment options.

Back in 2019, two developers started a class-action lawsuit against Apple, alleging that its App Store is a monopoly in the market for iOS apps and in-app distribution services. Their biggest gripes were the annual dev fees, the tedious review process, the 30 percent cut on all sales, and the fact that an app can fail to be approved or simply be booted from the App Store at any given moment, with no alternative avenues for people to get access to it.

The Cupertino giant this week agreed to settle the lawsuit with a $100 million payout in the form of a Small Developer Assistance Fund that will see developers receiving anywhere from $250 to $30,000 depending on their revenue recorded between 2015 and 2021. Apple created a website where eligible developers can claim their share of the fund, but it's not yet operational at the time of writing.

At the same time, Apple is updating its App Store policy in a way that "clarifies" what developers can and cannot do. The first and potentially the most important change is that app developers can now use the signup information received from users to contact them outside the app and inform them of alternative purchase options. However, Apple still won't allow promoting those options inside their apps.

Another change means developers will be able to choose from more than 500 price points to set for their paid apps, subscriptions, and in-app purchases, up from fewer than 100. As for the App Store fees, Apple said it will maintain the Small Business Program it introduced in 2020 for at least the next three years, which means that developers making less than $1 million per year will still be eligible to pay a reduced 15 percent cut of their sales to the Cupertino giant.

Apple will also maintain the appeal mechanism for developers who believe their apps were rejected unfairly, along with all the other subtle but important changes it introduced in the review policy last year. Additionally, the company will publish an annual transparency report where it will highlight "meaningful statistics about the app review process, including the number of apps rejected for different reasons, the number of customer and developer accounts deactivated, objective data regarding search queries and results, and the number of apps removed from the App Store."

One of the most criticized aspects of the App Store over the years has been the search algorithm, which was shown to strongly favor Apple's own offerings in a 2019 investigation. The company has since improved on that front, surfacing apps in search results based on "objective characteristics like downloads, star ratings, text relevance, and user behavior signals," and today's agreement means this system will remain in place for at least the next three years.

All of this may look like a small price to pay for the world's most valuable tech company, but remember that it's still embroiled in a lawsuit with Epic, not to mention a great deal of antitrust scrutiny in the US and Europe. The settlement is currently pending approval by the same judge presiding over the Epic vs. Apple case.

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Dimitriid

Posts: 1,103   +2,090
This is...extremely odd if you think about the context of their *other* big lawsuit with Epic right now: their only argument would be that Epic is pretty far from being a "small dev" but the fact that they're pretty much conceding ALL of Epic points in this other action is something that is not going to go unnoticed in that lawsuit and can only really, really hurt that on-going case in favor of Epic.
 

Neatfeatguy

Posts: 483   +785
This is...extremely odd if you think about the context of their *other* big lawsuit with Epic right now: their only argument would be that Epic is pretty far from being a "small dev" but the fact that they're pretty much conceding ALL of Epic points in this other action is something that is not going to go unnoticed in that lawsuit and can only really, really hurt that on-going case in favor of Epic.

Let's not forget that South Korea is looking to push a bill to keep companies like Apple and Google from forcing in app purchases through only their pay system. If it goes through, there could certainly be a domino effect across the world and Apple will have no choice but to allow purchasing through other options and not just the Apple store.

Maybe Apple is seeing the writing on the wall....?
 

Uncle Al

Posts: 8,229   +6,996
This rule also needs to be applied to Google for their ridicules "cut" from all android developed programs. Why the government hasn't come down on them hard is beyond me ....
 

Burty117

Posts: 4,229   +2,281
This rule also needs to be applied to Google for their ridicules "cut" from all android developed programs. Why the government hasn't come down on them hard is beyond me ....
It's harder to go after Google as they do provide a way of installing other app stores. It maybe messy, filled with warnings and very discouraged but at least it's there. Side-loading apps as well is possible.
 

MSIGamer

Posts: 52   +67
Actually 30 million goes to lawyers. So even when they're giving something there's still a 30% cut lol.
 

MSIGamer

Posts: 52   +67
"The first and potentially the most important change is that app developers can now use the signup information received from users to contact them outside the app and inform them of alternative purchase options."

Wait, so Apple always had the monopoly baked into their contracts? How is this rule even legal and how has Apple not been long punished for antitrust behavior years ago?...
 

MSIGamer

Posts: 52   +67
I'm sick of reading 'Cupertino giant' in every article about Apple on techspot. No other company is being referred to in this way, sometimes Microsoft as 'Redmond giant'.