On Thursday, a concession was disclosed by Apple as part of a preliminary settlement of a nearly 2-year-old lawsuit filed on behalf of iPhone app developers in the United States. So far, the concession covers the emailed messages but not the in-app notifications, further avoiding a commission system to the settlement.
By avoiding a commission system, Apple has agreed to allow iPhone app developers to inform their consumers about cheaper methods to pay for digital subscriptions and media. This is, by means of a commission system resulting in generation of billion dollars annually, for the makers of iPhone.
The concession also addresses a concern made by a federal judge who is anticipated to rule on a separate case brought by Epic Games in the near future. Apple will also create up a $100 million fund to compensate thousands of software developers who are the subject of the lawsuit with payments ranging from $250 to $30,000. App developers will have more possibilities to establish multiple prices within their apps, increasing the number of options from around 100 to 500.
Long-standing Apple policies prohibited app developers from emailing customers with information on how to pay for services outside the app, allowing them to avoid Apple commissions of 15% to 30%.
The concession now gives app companies a means to be more aggressive in urging their users to pay in alternative ways, as long as they obtain consumer approval.
The agreement also addresses a concern highlighted by United States District Judge Yvonne Gonzalez Rogers: why Apple didn’t enable developers to offer a variety of payment alternatives within their apps, similar to how brick-and-mortar stores can display a variety of credit cards in addition to cash.
Apple is still refusing to let developers use in-app notifications to encourage users to try out various payment methods. For developers who have long complained about this being a form of price gouging, simply being able to email users to explain ‘why they should pay outside the app’ is a breakthrough.
Apple has previously tweaked its app store commission system in response to legal pressure and increased scrutiny from lawmakers and regulators around the world, who are questioning whether the company’s tight control of the store is suffocating competition and innovation.
Apple has agreed to continue the lower commission for small developers for at least three more years as part of the settlement announced on Thursday.
On the other hand, Apple claims it forbids other stores from distributing apps on its iPhone to safeguard its own consumers’ security and privacy, while critics claim the corporation is simply trying to protect a billion-dollar cash cow.
Gonzalez Rogers will be voting onto whether the proposed settlement shall be approved or rejected on Oct. 12, when the hearing will be held on the subject.