Apple Pays $100 Million to Settle Developer Lawsuit and Agrees to Multiple App Store Changes

Apple today announced plans to make several changes to the App Store in order to settle a class-action lawsuit that was brought against Apple by developers in the United States.

app store blue banner
Under the terms of the deal, Apple will let developers use communication methods like email to tell customers about payment methods available outside of iOS apps, and it will expand the price points that developers can offer for apps, in-app purchases, and subscriptions. Apple also plans to create a $100 million "fund" for small developers as part of the settlement, and it will release annual transparency reports on the app review process.

Apple says that the settlement will make the ‌App Store‌ an "even better business opportunity for developers" while maintaining the safety of the ‌App Store‌.

"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," said Phil Schiller, Apple Fellow who oversees the App Store. "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."

To establish a settlement, Apple and the developers involved in the lawsuit have come to an agreement that "identifies seven key priorities shared by Apple and small developers." Apple will implement the following measures, as outlined in court papers:

  • Apple will maintain the ‌App Store‌ Small Business Program in its current structure for the next three years. Businesses earning less than $1 million annually will continue to pay a reduced 15 percent commission, while developers earning over that target will pay the standard 30 percent commission.
  • ‌App Store‌ search results will continue to be based on objective characteristics like downloads, star ratings, text relevance, and user behavior signals. Apple will maintain the current ‌App Store‌ search system for at least three years.
  • Apple will allow developers to use communications like email to share information about payment methods available outside of their iOS apps. Developers will not pay Apple a commission on purchases taking place outside of the app or the ‌App Store‌. Users must consent to the communication and can opt out.
  • Apple will expand the number of price points available to developers for subscriptions, in-app purchases, and paid apps from fewer than 100 to more than 500. Developers had complained about the $0.99 minimum price available in the ‌App Store‌ and the inability to offer price points not ending in $0.99, so that may change.
  • Apple will maintain the option for developers to appeal the rejection of an app based on perceived unfair treatment. Apple will add content to the App Review website to help developers better understand the appeals process.
  • Apple will create an annual transparency report based on ‌App Store‌ data, which will provide meaningful statistics about the app review process, including the number of apps rejected for different reasons, the number of customer and developer accounts deactivated, objective data regarding search queries and results, and the number of apps removed from the ‌App Store‌.
  • Apple is paying $100 million to developers to settle the lawsuit, and the money is being distributed as part of a "Small Developer Assistance Fund." Developers can claim between $250 and $30,000 based on their historic ‌App Store‌ participation. Eligible developers must have earned $1 million or less through the U.S. storefront for all of their apps in every calendar year in which the developers had an account between June 4, 2015, and April 26, 2021, a figure that encompasses 99 percent of U.S. developers. More information will be provided at a later date, and there is a settlement website, but it is not yet working.

The class-action lawsuit dates back to 2019 when a group of iOS developers accused Apple of using its ‌App Store‌ monopoly to impose "profit-killing" commissions. The lawsuit took issue with Apple's 30 percent cut of ‌App Store‌ sales, and was largely addressed with the late 2020 announcement of the App Store Small Business Program that cut the commission that small developers have to pay to 15 percent.

The developers who filed the lawsuit were also unhappy with Apple's minimum $0.99 purchase price for apps and in-app purchases, and they took issue with the $99 Apple Developer fee.

Apple will be implementing these changes pending approval from Yvonne Gonzalez Rogers, who is overseeing the case. Rogers is also handling the ongoing Epic v. Apple lawsuit.

Top Rated Comments

cmaier Avatar
3 weeks ago

Just be fair, Apple. Let developers earn their paycheck what they really deserve.
Sigh.

Exactly how is apple denying developers their paycheck? Do you mind if I set up a store and sell waffles on your front lawn? Or if I did that do you think you should maybe get a cut of the action?
Score: 58 Votes (Like | Disagree)
cmaier Avatar
3 weeks ago

“"From the beginning, the App Store has been an economic miracle”

It’s been an economic miracle for Apple; not for most developers.
Not every developer deserves to get rich. I made a ton of money selling apps on the App Store, and am thankful to Apple for giving me the opportunity - without their app distribution, ecosystem, sdks, etc., I wouldn’t have made a dime.
Score: 56 Votes (Like | Disagree)
cmaier Avatar
3 weeks ago

They knew what they was signing up from the start.
exactly. iOS is the best platform to target for developers because ios users actually spend money.

Why? Because the sdks allow developers to create great apps, and because apple makes it easy to avoid getting ripped off. When you buy an app it doesn’t automatically sign you up for email spam. If you subscribe, you can easily cancel your subscription from one place, without having to call a telephone and escalate through three levels of “customer service” who are paid to prevent you from cancelling. And even though there are exceptions, when you buy an app on the App Store you are much less likely to be downloading a scam app than from other app stores. All this means that customers are much more willing to spend their money. It’s perfectly fair for Apple to demand a cut of sales in exchange for access to these customers.
Score: 39 Votes (Like | Disagree)
cmaier Avatar
3 weeks ago
Sounds like Apple really didn’t agree to do much new here.
Score: 30 Votes (Like | Disagree)
Michael Scrip Avatar
3 weeks ago

The developers who filed the lawsuit were also unhappy with Apple's minimum $0.99 purchase price for apps and in-app purchases
So wait... do developers think 99 cents for an app or IAP is too high?

Are developers really itching to sell stuff for 49 cents?

Or do they want the minimum price raised?


and they took issue with the $99 Apple Developer fee.
Again... do they think the Developer Fee is too high?

You get a TREMENDOUS amount of value for your $99 yearly fee.

You're getting all the development tools, API access, testing capabilities, storage, e-commerce, worldwide tax calculations, cloud capabilities, etc. It allows anyone to create and sell apps to a billion potential users.

Read more here ('https://forums.macrumors.com/threads/epic-games-unlikely-to-win-injunction-in-ongoing-fortnite-battle-with-apple-jury-trial-possible.2257511/page-10?post=28966869#post-28966869')...

I'm struggling to think of a situation where the $99/year Developer Fee is a barrier to entry.
Score: 23 Votes (Like | Disagree)
mystery hill Avatar
3 weeks ago
"From the beginning, the App Store has been an economic miracle”

It’s been an economic miracle for Apple; not for most developers.
Score: 22 Votes (Like | Disagree)

Top Stories

app store blue banner

Apple Letting 'Reader' Apps Offer Links for Account Sign Ups Outside of the App Store to Close Japan Investigation

Wednesday September 1, 2021 5:09 pm PDT by
Apple today announced that the Japan Fair Trade Commission (JFTC) has agreed to close its App Store investigation in exchange for changes to how "reader" apps like Netflix operate. Reader apps allow users to browse previously purchased content or content subscriptions for digital magazines, newspapers, books, audio, music, and video. Going forward, developers that create "reader" apps will...
app store vs developers

Apple's Planned App Store Changes Will Barely Affect the Company's Bottom Line, Says Analyst

Wednesday September 8, 2021 8:00 am PDT by
As a result of legal and regulatory pressures, Apple recently announced some upcoming changes to its App Store policies, such as letting developers email customers about payment options available outside of their iOS app and allowing "reader" apps like Spotify and Netflix to include an in-app link to their website for account signup. Apple said the changes "will help make the App Store an...
app store blue banner

Some Developers Say Apple Letting Apps Like Netflix and Spotify Share a Link to Web for Account Sign-Up Isn't Enough

Thursday September 2, 2021 9:12 am PDT by
Apple on Wednesday evening announced that, starting in early 2022, it will allow developers of "reader" apps to include an in-app link to their website for users to set up or manage an account. "Reader" apps allow a user to access previously purchased content or subscription-based content for digital magazines, newspapers, books, audio, music, and video, according to Apple, such as Netflix,...
app store gold banner

Notice to Developers: You Could Be Entitled to Between a $250 and $30,000 Payment From Apple

Friday August 27, 2021 6:55 am PDT by
Apple on Thursday evening announced it has reached a $100 million settlement that, pending court approval, will resolve a class action lawsuit from U.S. developers who alleged that Apple has a monopoly on the distribution of iOS apps and in-app purchases. As part of the settlement, some U.S. developers would be entitled to receive a payment from Apple, so long as they meet certain...
app store blue banner

Developers Complain as App Store Feature Promotes Rip-Off Apps

Thursday August 5, 2021 6:12 am PDT by
Apple has featured a number of apps with disproportionately expensive subscriptions on the App Store, arousing the ire of some developers. The App Store feature on the Australian App Store, first highlighted by Beau Nouvelle on Twitter, is called "Slime relaxations" and reportedly features apps that are non-functional and seek to charge disproportionately costly in-app purchase...
Mac App Store General Feature

South Korea Delays Bill That Would Ban Apple From Requiring Developers to Use In-App Purchase System

Monday August 30, 2021 7:07 am PDT by
South Korea has delayed voting on a bill that would ban Apple and Google from requiring developers to use their in-app purchasing systems, a move that would open the door to allowing third-party payment methods, representing a possible significant threat to Apple and Google's app marketplace business models. The bill, coming in the form of an amendment to the existing Telecommunications...
aapl logo banner

Apple's Past Sideloading Plans, Ecosystem Lock-in Strategy, and More Revealed in Internal Documents

Friday August 20, 2021 7:35 am PDT by
Documents highlighted by The Verge and disclosed as part of the Apple vs. Epic Games trial have revealed that Apple discussed plans for sideloading apps, sought to lock users into its ecosystem using gift cards, attempted to tackle chaos in the App Store review process, and more. Several of the internal documents related to internal discussions around the possibility of sideloading iPhone...
General App Store South Korea Feature Feature

South Korea Passes Bill Banning Apple From Requiring Developers to Use App Store In-App Purchase System

Tuesday August 31, 2021 3:12 am PDT by
South Korea today passed a bill that bans Apple and Google from requiring developers to use their own respective in-app purchasing systems, allowing developers to charge users using third-party payment methods, The Wall Street Journal reports. The bill was originally supposed to be voted on yesterday, however, more urgent matters presented to South Korea's National Assembly meant the bill...
app store blue banner

App Store Ecosystem Responsible for Estimated $643 Billion in Billings and Sales in 2020, According to Apple-Commissioned Study

Wednesday June 2, 2021 10:00 am PDT by
The App Store ecosystem facilitated an estimated $643 billion in billings and sales in 2020, an increase of 24 percent year-over-year, according to an Apple-commissioned study done by Analysis Group economists. [PDF] The study, "A Global Perspective on the Apple App Store Ecosystem," comes as Apple awaits a decision in its ongoing trial with Epic Games, much of which focused on App Store...
app store blue banner

Apple Could Face Investigation in India Over App Store In-App Purchase System

Thursday September 2, 2021 1:25 am PDT by
Apple could be facing a widespread investigation into the App Store in India, and more specifically, the company's in-app purchasing system, which grants it a 15% to 30% commission for all purchases made, reports Reuters. The Competition Commission of India (CCI), which oversees cases of possible anti-competitive and antitrust behavior, is reviewing an antitrust challenge case against Apple...