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Apple offers €85 million App Store deal with small developers after class-action lawsuit

Apple announced it is making changes to its App Store, pending court approval.
Apple announced it is making changes to its App Store, pending court approval.   -   Copyright  Kathy Willens/Copyright 2020 The Associated Press.
By Euronews, AFP, Reuters

Apple has announced it is making changes to its App Store, pending court approval, as part of a proposed legal settlement that could also see the California tech company pay out $100 million (€85 million) to small app developers in the United States.

The tech giant said in a statement on Thursday that developers would be able to tell iPhone and iPad customers about ways to pay for downloads that don't involve Apple taking a cut of the revenue, saying the change would help make the App Store an "even better business opportunity for developers".

The offer comes as part of a proposed settlement following a class-action lawsuit brought by US developers and amid mounting pressure from the authorities and companies on its approach to competition.

Apple suggested several changes to the rules of its App Store, which EU competition commissioner Margarethe Vestager has previously described as a "monopoly". They must be approved by a court before coming into effect.

“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 said in a statement.

What's changing?

App developers will be able to send an email to their users to inform them that they can buy a subscription, for example, via their website. In this case, the publisher does not pay a commission to Apple.

The updates constitute the latest chapter of Apple’s longstanding efforts to evolve the App Store into an even better marketplace for users and developers alike.
Apple

The new agreement also plans to give developers more leeway to set the prices of their apps, subscriptions or in-app purchases.

Apple claimed the update would give both users and developers a better App Store experience.

What else is Apple doing?

Apple also intends to create a fund to help small American publishers, meaning those that earn less than a million dollars per year for all their apps in the United States.

The company previously announced a move to reduce its cut of sales made by these smaller developers to 15 per cent last year.

With these concessions, the iPhone maker no doubt hopes to ease the pressure on various fronts.

Why is Apple under pressure?

On the court side, Apple is awaiting the verdict in the lawsuit brought against it by Epic Games.

The publisher of the game Fortnite, like many other small and large developers, accuses Apple of abusing its dominant position by taking too high commissions on consumer spending and by imposing on them the App Store as a mandatory intermediary between them and their users.

Apple has always put the imperative of data security and confidentiality first.

If iOS implemented a more open system, the App Store would become "a big mess", Apple CEO Tim Cook said in May.

Apple's own digital store is the only place iPhone or iPad users can download apps.

As iOS is the second-largest mobile operating system in the world, after Google's Android, these consumers represent a lucrative market. They spent $643 billion (€546 billion) on apps in 2020, according to Apple.