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Apple agreed to pay $100 million and on Thursday agreed to change one of its App Store rules to sue app developers, eliminating another legal headache for the company over its control over mobile apps.
As part of the deal, Apple said it will create a $100 million fund for payments to small app developers, allowing developers to instruct customers in emails on how to pay for services outside of Apple’s payment systems; this way, developers can avoid Apple’s commission on app sales. Apple has also agreed not to raise the commission rate for junior developers. reduced from 30 percent last year to 15 percent, for at least three years.
The deal seems like a small price to pay for the world’s richest company to avoid another protracted legal battle that could pose huge risks to its business by targeting the iPhone App Store.
Apple is awaiting a federal judge’s decision in a separate lawsuit from Epic Games, the maker of the popular game Fortnite, which forced app developers to completely avoid App Store commissions. Consumers have also sued Apple for app commissions. The US Supreme Court allowed going forward in federal court, and that’s asking for class action status.
An Apple executive told reporters in a briefing that Thursday’s deal shows small app developers are mostly good at maintaining their current App Store policies, including reduced commission. But larger developers who pay the higher fees continue to complain.
He also said that Apple’s willingness to allow developers to inform customers about alternative payment methods via email and other channels is a huge concession. App developers will still be prohibited from providing information about other payment methods to customers inside iPhone apps.
Apple prevented reporters from naming or quoting the Apple executive directly.
Steve Berman, attorney for the plaintiffs in the lawsuit seeking class action status, said: “A lawsuit brought by two developers standing in the shoes of tens of thousands of US iOS developers brings a very important change.”
In the deal, Apple also agreed to publish an annual report on the number of apps it has rejected or removed from the App Store, and data on search results. New York Times reported in 2019 Apple prefers its own applications in search results compared to its competitors. Apple agreed in the deal to ensure that search results “continue to be based on objective attributes” for at least three more years.
The settlement will be subject to approval by U.S. District Court Judge Yvonne Gonzalez Rogers for the Northern District of California, the same judge presiding over consumer lawsuits against Epic Games and Apple.
According to the plaintiffs’ lawyers, developers who earned less than $1 million a year in the App Store from June 2015 to April 2021 are eligible to receive payments between $250 and $30,000 each from Apple’s proposed $100 million funding.
Separately, on Thursday, Apple said it would also allow news organizations to pay a 15 percent discounted commission on subscriptions sold through iPhone apps. only if they joined It’s on Apple’s news service, Apple News. The Times and some other news outlets Pulled from Apple News because in recent years they have taken control of their relationships with readers and potential subscribers.
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