Apple
In a press release, Apple wrote that the settlement allows developers to "share purchase options with users outside of their iOS app; expands the price points developers can offer for subscriptions, in-app purchases, and paid apps; and establishes a new fund to assist qualifying U.S. developers."
The suit's proposed class includes all developers that sell apps or products through the App Store. The settlement establishes a $100 million fund for "qualifying developers" covered in the lawsuit with awards ranging from $250 to $30,000. The agreement also proposes a change to the App Store that will give app developers 500 different price options within their apps, compared to a previous set of 100.
Developers still won't be able to send users in-app notifications about alternative payment options. Richard Czeslawski, one of the plaintiffs on the developer suit, says even being able to email is a "game-changer".
The lawsuit, brought more than two years ago by game developer Pure Basketball Sweat, Inc., alleges that Apple uses its control over the sale of iOS apps and app products to stifle competition. Prior to the proposed settlement, iOS developers had no choice but to sell their apps and the products in those apps through the App Store. Under the settlement, developers would be able to send users emails with information on cheaper ways to pay for their products.
Apple argues that its restrictions are meant to protect users and their privacy.
"From the beginning, the App Store has been an economic miracle; it is the safest and most trusted place for users to get apps, and an incredible business opportunity for developers to innovate, thrive, and grow," Phil Schiller, Apple Fellow who oversees the App Store, wrote in a release.
The lawsuit also alleges that Apple's then-policy of taking a 30% commission on every sale processed through the App Store created artificially inflated prices. The company makes billions of dollars each year through App Store commissions. Earlier this year, after the company came under fire from lawsuits and lawmakers alike, Apple agreed to reduce its commission to 15% for developers generating less than $1 million in annual revenue.
That reduction has some notable exceptions: neither Spotify nor Epic Games will receive the reduced 15% rate. These two app giants generate the most revenue and are some of the loudest voices complaining about Apple's anti-competitive practices. Epic has filed its own suit against Apple, and that suit is awaiting a ruling from U.S. District Judge Yvonne Gonzalez Rogers. Gonzalez Rogers is also set to issue a decision on the proposed Apple settlement on October 12.
Gonzalez Rogers gave some indication as to her opinion on the topic of Apple's alleged monopolistic control during a hearing in the case brought by Epic. According to the Associated Press, the judge "openly wondered why Apple couldn't allow developers to display a range of payment options within their apps."
