Apple on Thursday announced the proposed settlement in a 2019 lawsuit with US developers. The two parties reached a common ground, Apple explains. This means Apple will make a few significant changes to how the App Store works on iPhone and iPad. The changes will impac both consumers and developers. One is allowing app creators to contact their customers and inform them about other payment options for in-app goods. That’s something Apple hasn’t done before, but it could impact the entire App Store in the future. On top of that, Apple will pay $100 million as part of the settlement, distributed to all the plaintiffs who file a claim. The settlement does not involve Epic Games, and that antitrust battle remains open.
What it means for iPhone users
The Apple App Store settlement will impact iPhone and iPad users directly in the coming months. For starters, Apple will let developers collect contact information in apps, including emails. That’s a practice that wasn’t available before. It’s directly related to Apple’s other significant concession. The iPhone maker will let developers inform their customers about additional payment options that are outside of the App Store. From Apple’s press release:
To give developers even more flexibility to reach their customers, Apple is also clarifying that developers can use communications, such as email, to share information about payment methods outside of their iOS app. As always, developers will not pay Apple a commission on any purchases taking place outside of their app or the App Store. Users must consent to the communication and have the right to opt out.
Apple will also expand the number of price points for in-app payments from fewer than 100 to more than 500. What this means is that you might see different pricing tiers in certain apps going forward.
The proposed settlement also indicates that the App Store Search results will “continue to be based on objective characteristics like downloads, star ratings, text relevance, and user behavior signals” for at least the next three years.
Developers who earn less than $1 million annually from the App Store will keep paying Apple just 15% commission. That’s instead of 30% for all app purchases and in-app transactions.
What the Apple App Store settlement means to developers
Some of the provisions in the proposed settlement concern developers directly. Apple says that it’ll continue to allow developers to appeal the rejection of an app. It’ll also add more content to the App Review website so developers can understand how the appeal process works.
Apple will create annual transparency reports for the App Store. They “will share 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.”
Finally, Apple will establish the $100 million Small Developer Assistance Fund that will provide settlements to up to 67,000 developers in the class action suit who “earned proceeds in the App Store of no more than $1,000,000 in calendar years 2015 through 2021.” The smallest payouts are $250 each per ArsTechnica. They can go up to $30,000 for developers who earned over $1 million during the class period. The figures might increase for those who file a claim, as not all of them are expected to file one.
The App Store settlement doesn’t involve Epic
Epic Games filed a notorious Fortnite-based antitrust suit against Apple. That one is separate from the 2019 lawsuit that Apple and US developers want to settle. Epic and the other companies in The Coalition for App Fairness advocacy group against Apple aren’t happy. This is their statement about the App Store changes following the 2019 suit:
Apple’s sham settlement offer is nothing more than a desperate attempt to avoid the judgment of courts, regulators, and legislators worldwide. This offer does nothing to address the structural, foundational problems facing all developers, large and small, undermining innovation and competition in the app ecosystem. 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. If this settlement is approved, app makers will still be barred from communicating about lower prices or offering competing payment options within their apps. We will not be appeased by empty gestures and will continue our fight for fair and open digital platforms
The judge in the 2019 case still has to approve the App Store settlement formally.