Tech

Apple to Make Changes to App Store Rules in Settlement With U.S. Developers

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Apple will implement changes to its App Store regulations as part of a settlement with U.S. developers, the company said Thursday evening.

As part of the changes, developers will be allowed to contact users to inform them about purchase options outside of the iOS app, which could help bypass Apple’s commission charges that can be as high as 30 percent. Apple will also establish a $100 million fund for smaller app developers that made $1 million or less for every year they had an account between June 4, 2015, and April 26, 2021 — a group that Apple said comprised 99 percent of its U.S. developers.

Under long-standing Apple rules, makers of iPhone apps were forbidden to email users with information on how to pay for services outside the app, which would circumvent Apple commissions of 15% to 30%. The concession now opens one way for app developers to more aggressively encourage its users to pay in other ways, so long as the companies obtain consumer consent.

“We would like to thank the developers who worked with us to reach these agreements in support of the goals of the App Store and to the benefit of all of our users,” Phil Schiller, an Apple fellow who oversees the App Store, said in a statement.

The settlement, which still must be approved by a judge, comes two years after a group of U.S. developers sued Apple over its management of the App Store, alleging that the tech giant was breaching antitrust laws. The suit is separate from an ongoing case between Apple and Epic Games, the creator of Fortnite.

Spotify, which has been openly critical of Apple's App Store practices, feel the proposed changes don't go far enough. “Apple’s proposed concessions fail to address the most basic aspects of their anticompetitive and unfair App Store practices," said Spotify head of global affairs and chief legal officer Horacio Gutierrez in a statement. "They are attempting to distract policymakers and regulators and slow down the momentum that’s building around the world to address their behavior.  Apple has been allowed to abuse their dominant position for years, and we continue to seek real reforms to ensure that companies can innovate and compete fairly, on a level playing field.”

The compromise addresses a concern that U.S. District Judge Yvonne Gonzalez Rogers repeatedly raised while presiding over the high-profile Epic-Apple trial. She openly wondered why Apple couldn’t allow developers to display a range of payment options within their apps, much like brick-and-mortar retailers can show a range of different credit cards they accept in addition to cash.

Apple still isn’t allowing developers to use in-app notifications to prod consumers to explore different payment options.

But just being able to email users to explain why they should pay outside the app is a breakthrough for developers who have complained about Apple’s commissions as a form of price gouging for years.