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
10 months 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
10 months 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: 57 Votes (Like | Disagree)
cmaier Avatar
10 months 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
10 months ago
Sounds like Apple really didn’t agree to do much new here.
Score: 30 Votes (Like | Disagree)
Michael Scrip Avatar
10 months 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
10 months 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)

Related Stories

app store blue banner

Apple Defends Its Ads for Third-Party Apps, Says It Regularly Communicates With Developers and Has Been Running Them for Five Years

Monday November 15, 2021 10:11 am PST by
Following allegations that Apple secretively buys ads for subscription-based apps to collect more commission, Apple has now said that this is a mischaracterization and developers are fully aware of the ads it runs on their behalf. Earlier today, we reported on an article by Forbes which claimed that the company "secretly" or "quietly" places ads for subscription-based apps without their...
iOS App Store General Feature Dock 2

Apple Defends App Store Changes in the Netherlands as Fines Reach €30 Million

Monday February 28, 2022 9:32 am PST by
Amid an ongoing dispute with the Authority for Consumers and Markets (ACM) in the Netherlands over the App Store, Apple has defended its plan to require app developers to submit an additional app binary for the Dutch storefront if they wish to use a third-party payment processing method. The ACM has ruled that Apple must allow dating apps in the Netherlands to use third-party payment...
iOS App Store General Feature Dock

Indie Developer Dogged By Scammy Clone Apps Again Highlights the Holes in Apple's App Store Review Process

Monday February 21, 2022 9:29 am PST by
Apps that copy concepts and features from other apps are nothing new in the ‌App Store‌, but scammy like-for-like clones of genuine apps remain a perennial problem that Apple still hasn't resolved, as indie developer Kevin Archer recently discovered. Archer is responsible for 2Stable's Authenticator App, a feature-rich app that stores and generates secure two-factor authentication tokens...
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 russia

App Store and iTunes Purchases Reportedly 'Turned Off' in Russia

Thursday March 10, 2022 4:39 am PST by
iPhones.ru is reporting that iTunes and App Store purchases can no longer be made by Apple device users located in Russia, leaving them unable to pay for apps, media, or Apple services. According to the Russia-based site, it is now impossible for users to add funds to their App Store or iTunes Store accounts using regional bank cards issued by Russian banks including Alfa-Bank, Sber, and...
iOS App Store General Feature JoeBlue

Apple to Allow In-App Third-Party Payment Options for First Time in the Netherlands

Saturday January 15, 2022 12:39 am PST by
Apple has announced that it will allow third-party payment options for in-app purchases for dating apps in the Netherlands, in the first ever concession of its kind. In a message posted on its developer site late on Friday, Apple announced that it will comply with a Netherlands Authority for Consumers and Markets (ACM) ruling that compels the company to allow third-party payment services to...
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...
iOS App Store General Feature Dock

Dutch Regulator Says Apple's Plan for Third-Party In-App Payments is Insufficient, Fines Apple 5 Million Euros

Monday January 24, 2022 6:33 am PST by
The Dutch Authority for Consumers and Markets (ACM) has ruled that Apple's plan to allow App Store dating apps to use third-party payment methods for in-app purchases does not sufficiently meet the requirements of a previous ruling. As a result, the ACM has hit Apple with an initial 5 million euro fine as a consequence, and fines will continue to be assessed at 5 million euros per week up to a...

Popular Stories

maxresdefault

Unbox Therapy Shares Hands-On Look at iPhone 14 Pro Max Replica

Monday May 16, 2022 4:40 am PDT by
YouTuber Unbox Therapy has shared a hands-on look at the iPhone 14 Pro Max using what he claims is a one-to-one replica created by third-party case makers with access to detailed schematics and dimensions for Apple's new upcoming flagship smartphone. As with the iPhone 13 Pro lineup, in 2022, we are expecting a 6.1-inch iPhone 14 Pro and a 6.7-inch iPhone 14 Pro Max, but this time the Pro...
macOS Monterey 2

Apple Releases macOS Monterey 12.4 With Support for Studio Display Webcam Update

Monday May 16, 2022 10:10 am PDT by
Apple today released macOS Monterey 12.4, the fourth major update to the macOS Monterey operating system that launched in October 2021. macOS Monterey 12.4 comes over two months after the launch of macOS Monterey 12.3, an update that added Universal Control. The ‌‌‌‌‌macOS Monterey‌‌ 12.4 update can be downloaded on all eligible Macs using the Software Update section of System...
iOS 15

Apple Releases iOS 15.5 and iPadOS 15.5 With Wallet and Podcast Updates

Monday May 16, 2022 10:00 am PDT by
Apple today released iOS 15.5 and iPadOS 15.5, the fifth major updates to the iOS and iPadOS 15 operating systems that were initially released in September 2021. iOS and iPadOS 15.5 come a little over two months after the launch of iOS 15.4 and iPadOS 15.4. The iOS 15.5 and iPadOS 15.5 updates can be downloaded for free and the software is available on all eligible devices over-the-air in...
iOS 16 mock for article

Gurman: iOS 16 to Include New Ways of System Interaction and 'Fresh Apple Apps'

Sunday May 15, 2022 6:14 am PDT by
iOS 16 will include new ways of interacting with the system and some "fresh Apple apps," Bloomberg's Mark Gurman has said, offering some more detail on what Apple has in store for the upcoming release of iOS and iPadOS set to be announced in a few weeks at WWDC. In the latest edition of his Power On newsletter, Gurman wrote that while iOS 16 is not likely to introduce a major face-lift to...
Prosser Series 8 3

Apple Watch Series 8 Rumored to Feature New Design With Flat Display

Wednesday May 18, 2022 6:21 am PDT by
The Apple Watch Series 8 could feature an all-new design with a flat display, according to the leaker known as "ShrimpApplePro." In his latest video on the YouTube channel Front Page Tech, Jon Prosser highlighted information from ShrimpApplePro that suggests the Apple Watch Series 8 could feature a flat display in what seems to be a design originally rumored for the Apple Watch Series 7. ...
Whatsapp Feature

WhatsApp to Let Users Leave Group Chats 'Silently' and View Rich Link Previews in Status Updates

Tuesday May 17, 2022 3:07 am PDT by
WhatsApp is working on a new feature that will allow users to "silently" leave group chats hosted by the messaging platform instead of all members of the group being notified when they do. As it stands, when someone leaves a group chat, WhatsApp announces their exit to the entire group, making the act of leaving very public. It's not possible right now to leave a group quietly, but WhatsApp...
apple tv 4k design green

Apple Releases tvOS 15.5 for Apple TV HD and Apple TV 4K

Monday May 16, 2022 9:57 am PDT by
Apple today released tvOS 15.5, the fifth major update to the tvOS operating system that first launched in September 2021. tvOS 15.5 comes more than two months after the release of tvOS 15.4, an update that brought support for captive WiFi networks. tvOS 15.5 can be downloaded over the air on the Apple TV through the Settings app by going to System > Software Update. ‌‌‌‌‌‌Apple...