Apple relaxes App Store restrictions after settlement with small developers

By Amirtha P S, Desk Reporter
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The American technology giant Apple has agreed to relax App Store restrictions on small developers, striking a deal in a class-action lawsuit as the iPhone maker awaits a ruling by the same judge in a separate App Store dispute brought by the developer behind Fortnite.

The settlement agreement also includes changes in Apple’s policies and lets iOS developers contact their customers, with permission, using information collected inside their apps to tell them about payment options outside the App Store.

But Apple kept intact the vast majority of the App Store business practices that have been challenged in courts and legislatures. Instead, it gave up only $100 million, a small sum for a company worth more than $2.4 trillion, and a set of email marketing restrictions that legal experts had said could be difficult to defend even under a prior US Supreme Court case that allows companies to bar their business partners from steering customers toward alternative payment methods.

In 2019, a group of smaller software developers brought the lawsuit, alleging that Apple broke antitrust laws with practices like charging commissions of up to 30 percent. The iPhone maker said it has reached a proposed settlement that covers US developers that made $1 million a year or less under which the developers release all claims that Apple’s commissions were too high.

Apple is waiting for a decision in a higher-profile antitrust case filed by Fortnite creator Epic Games. The proposed settlement will need approval from Judge Yvonne Gonzalez Rogers of the US District Court for the Northern District of California, who is expected to hand down a decision in the Epic case.

In line with last days’ settlement agreement, Apple said it will make changes to the App Store, including extending for three years a change made last year that lowers commissions for smaller developers to 15 percent.

Developers have long been able to take other forms of payment outside of their apps to avoid commissions to Apple, and some, like Netflix, shun Apple’s in-app payment system. However, the tech giant maintains strict rules against developers using contact information taken from customers who sign up via the App Store to later telling those customers about alternative payment methods, which are often priced lower because they do not require fees to Apple.

Apple said the changes will apply to all developers globally, not just the class of smaller developers in the US covered directly by the settlement. The company will also create a $100 million assistance fund for small developers.

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