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Apple will finally let developers tell users about non-App Store purchase options

Home screen for iPhone with the App Store icon.

Getty Images | NurPhoto

Apple will finally let developers tell users about purchase options available outside the iOS App Store. The iPhone maker agreed to this and other concessions – including $ 100 million in payment to developers ̵

1; in a proposed settlement of a class action lawsuit that was appealed by two app developers in 2019.

Apple and the developers who sued the company submitted proposals today and called on a federal judge to approve the settlement. The case is in the U.S. District Court for the Northern District of California.

“Apple has agreed to revise the App Store guidelines so that developers of all app categories can communicate with consenting customers outside the app, including via email and other communication services, about purchasing methods other than in-app purchases … This order is extremely valuable. “To inform customers about alternative payment options, developers can avoid paying Apple’s commissions and also exert competitive pressure on Apple to discipline their prices,” the plaintiffs’ brief said.

The settlement period does not allow developers to tell users about purchasing opportunities that are not in the App Store in apps themselves, which requires that such communication takes place outside the apps. App makers will be able to contact customers using email addresses and phone numbers retrieved in their apps, and tell them how to purchase subscriptions and other digital content from the developer’s own websites or elsewhere.

Apple does not currently allow developers to “use contact information (email, phone numbers, etc.) obtained in an app to contact the user base outside the app,” which effectively “prevents developers from notifying their customers of alternative payment options”, plaintiffs In short. “The proposed settlement lifts this limitation, and it does for all app categories.”

It is not clear whether Apple will make the change in the near future or wait until the settlement is approved and implemented. There was no mention of the Mac App Store in the settlement proposals.

Apple calls the deal “a win-win”

Apple described the settlement in a press release, saying it would allow developers to “use communications, such as email, to share payment method information outside of the iOS app. As always, developers will not pay Apple a commission for purchases made outside of. the app or the App Store. Users must consent to the communication and have the right to opt out. “

Apple’s approval proposal called the settlement a “win-win situation” that benefits developers and Apple. The benefits to Apple are that “class members” expressly accept the appropriateness of Apple’s commission structure “,” and “release their claims against Apple, including” any claim, claim, argument or theory that they were “overburdened” during the Class Period by commissions such as Apple charges for paid downloads or in-app purchases of digital content (including subscriptions) through the App Store. “” Apple said that the concessions from developers “are important acknowledgments.”

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

Apple said it was “convinced” that it would win the lawsuit, and that the evidence “states that the practice challenged in this and other cases is both legal and well-founded on business necessity – including the protection of Apple’s intellectual property and the protection of security. and privacy for Apple customers. “However, Apple said it” would rather work with developers than sue them “and that the settlement” will avoid the expense and distraction of further litigation. “

The antitrust bill could force major changes

The concession comes as Apple faces antitrust pressure, including legislation that could force Apple to allow side-loading of apps on iOS and third-party App Stores. This bill, the Open App Markets Act, was proposed by U.S. Senators Richard Blumenthal (D-Conn.), Marsha Blackburn (R-Tenn.) And Amy Klobuchar (D-Minn.).

Blumenthal issued a statement calling today’s settlement a “strong sign that Apple and Google’s stranglehold on app store markets are purely self-serving.”

“This marks a significant step forward, but does not address the full and lively extent of market abuse and practices that are still widespread across app markets such as [the] The Open App Markets Act would address, “he said.” Today’s move only increases momentum and reveals further violent anti-competitive abuses in the app markets. The status quo-guard-hen house will remain until there are clear and enforceable rules for Apple and Google to play by. “

Group that includes Epic Games calls it a “shame settlement”

Apple is also facing a lawsuit over the App Store filed by Epic Games, the maker of Fortnite. The Coalition for App Fairness advocacy group launched by Epic and other companies such as Spotify and Match Group called the Apple settlement a “shame”. The group’s statement said:

Apple’s offer of shame settlement is nothing more than a desperate attempt to avoid judgments from courts, regulators and legislators around the world. This offer does nothing to solve the structural, fundamental problems of all developers, large and small, which undermine innovation and competition in the app ecosystem. Allowing developers to communicate with their customers about lower prices outside their apps is not an admission and further highlights Apple’s total control over the app market. If this settlement is approved, app manufacturers will still be barred from communicating about lower prices or offering competing payment options in their apps. We will not be reassured by empty movements and will continue the fight for fair and open digital platforms.

67,000 developers eligible for payments

Apple agreed to pay $ 100 million to a Small Developer Assistance Fund for a settlement class of about 67,000 developers who “earned in the App Store revenue of no more than $ 1,000,000 in the calendar year 2015 through 2021”. Developers will receive payments based on their “historical revenue” from selling apps on the Apple App Store, apparently meaning the total sales since 2015.

The minimum payouts of $ 250 each would go to developers who earned $ 100 or less at the store, which consists of 51 percent of the class of 67,000 members. Minimum payments will go up to $ 30,000 for developers who earned over $ 1 million during the class period, but about 95 percent of the class would receive minimum payments of between $ 250 and $ 2,000.

These are really “minimum payments”, said the developers’ brief. “They would only apply if each member of the settlement class submits an approved claim, “said the minutes. The proposed agreement requires the settlement administrator to send messages via email and mail to the 67,000 class members. However, the proposed settlement administrator” estimates a claim rate of 35 percent in this case, “and “minimum payout amount will increase proportionally in each level” to distribute money that would have gone to qualified but undeveloped developers.

Apple also agreed to maintain some of its current policies for at least three years after the settlement. It includes the Small Business Commission, which allows businesses that earn less than $ 1 million a year to pay 15 percent of Apple’s App Store revenue instead of 30 percent. Apple said it also “agreed that search results would continue to be based on objective characteristics such as downloads, star ratings, text relevance and user behavior signals”, and to “maintain the ability for developers to appeal an app based on perceived unfair treatment.”

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