Apple will finally allow developers to inform users about purchase options outside of the App Store

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Apple will finally allow developers to inform users about purchase options available outside of the iOS App Store. The iPhone maker accepted this and other awards, including $ 100 million in payments to developers, in a proposed class action settlement. lawsuit submitted by two app developers in 2019.

Apple and the developer plaintiffs who sued the company filed motions today urging a federal judge to approve the deal. The case is in the United States District Court for the Northern District of California.

“Apple agreed to revise its App Store Guidelines to allow developers of all categories of applications to communicate with consenting customers outside of their application, including through email and other communication services, about methods of purchase other than in-app purchase … This injunction is extremely valuable. By informing customers of alternative payment options, developers can avoid paying Apple commissions and, furthermore, put competitive pressure on Apple to discipline your prices “, plaintiffs letter said.

The term of the agreement would not allow developers to inform users about non-App Store purchase options within the applications themselves, requiring such communication to take place outside of the applications. App builders could contact customers using email addresses and phone numbers obtained within their apps and tell them how to purchase subscriptions and services on the developers’ websites or elsewhere.

It’s unclear whether Apple will make the change immediately or wait until the deal is approved and implemented. The Mac App Store was not mentioned in the conciliation motions.

Apple says the deal is “win-win”

Apple described the deal in a Press release, saying it will allow developers to “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 for purchases made outside of their app. or from the App Store “. Users must consent to the communication and have the right to opt out. “

From Apple approval motion called the deal “a win-win situation” that benefits developers and Apple. The benefits to Apple are that “class members” expressly agree to the adequacy of Apple’s commission structure “and” release their claims against Apple, including “any claims, disputes, arguments, or theories that they were” charged from more “during the Class Period under the fees charged by Apple on paid downloads or in-app purchases of digital content (including subscriptions) through the App Store.” Apple said those concessions from developers “are important recognitions.”

Apple said it also agreed to “expand the number of price points available to developers for subscriptions, in-app purchases and paid apps from less than 100 to more than 500.”

Apple said it is “confident” that it would win at trial and that the evidence “establishes that the practices challenged in this and other cases are legal and well justified by business needs, including the protection of Apple’s intellectual property and the protection of the security and privacy of Apple customers. ” However, Apple said it “would rather work with developers than litigate against them” and that the settlement “will avoid the expense and distraction of further litigation.”

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Antitrust bill could force bigger changes

The concession comes as Apple faces antitrust pressure, including legislation that could force Apple to allow apps to be downloaded from iOS and third-party app stores. That bill, the Open Market Applications Act, was proposed by US Senators Richard Blumenthal (D-Conn.), Marsha Blackburn (R-Tenn.), And Amy Klobuchar (D-Minn.).

Blumenthal issued a statement calling today’s deal a “powerful signal that Apple and Google’s dominance over the app store markets is purely selfish.”

“This marks an important step forward, but does not rectify the wide and vivid range of market practices and abuses that are still pervasive in application markets that [the] The Open App Markets Act would address, “he said.” Today’s move only increases momentum and further exposes rampant anti-competitive abuses in app markets. The status quo of hen fox protection will remain until there are clear and enforceable rules for Apple and Google to follow their rules. “

The group that includes Epic Games calls it a “bogus deal”

Apple is also facing an App Store lawsuit brought by Epic Games, the maker of Fortnite. The advocacy group Coalition for App Fairness released by Epic and other companies such as Spotify and Match Group called the Apple deal a “sham.” The groups statement said:

Apple’s bogus deal offer is nothing more than a desperate attempt to avoid the judgment of courts, regulators and legislators around the world. This offering does nothing to address the fundamental and structural problems faced by all developers, large and small, that undermine innovation and competition in the application ecosystem. Allowing developers to communicate with their customers about lower prices outside of their applications is not a concession and further highlights Apple’s total control over the application market. If this deal is approved, app makers will still not be able to communicate about lower prices or offer competing payment options within their apps. We will not be appeased with empty gestures and we will continue our fight for fair and open digital platforms.

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67,000 developers eligible for payments

Apple agreed to pay $ 100 million to a Small Developer Assistance Fund for a settlement class consisting of approximately 67,000 developers who “made App Store earnings of no more than $ 1,000,000 in calendar years 2015 through 2021.” Developers will receive payments based on their “historical earnings” from the sale of applications on the Apple App Store, which apparently means their total sales since 2015.

The smallest minimum payouts of $ 250 each would go to developers who made $ 100 or less in the store, which consists of 51 percent of the 67,000-member class. Minimum payments will go up to $ 30,000 for developers who made more than $ 1 million during the class period, but about 95 percent of the class would receive minimum payments of between $ 250 and $ 2,000.

Those are really “minimum payments,” the developers report said. “They would only apply if each settlement group member submits approved claim, “the brief reads. The proposed settlement requires the settlement administrator to send email and mail notices to the 67,000 group members. However, the proposed settlement administrator” estimates a 35 percent claims rate on This matter “and” the minimum payment amounts will increase proportionally at each level “to distribute the money that would have gone to developers who are eligible but do not make claims.

Apple also agreed to keep some of its current policies for at least three years after the deal. That includes the small business commission price that allows businesses making less than $ 1 million annually to pay 15 percent of App Store revenue to Apple instead of 30 percent. Apple said it also “agreed that its search results will continue to be based on objective characteristics such as downloads, star ratings, text relevance and user behavior cues,” and that it “maintains the option for developers to appeal the rejection of an application. based on perceived unfair treatment. “

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