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

[cmaier]

I am not a developer, so maybe I could share how I would see all this from the perspective of a consumer who is entrenched in the apple ecosystem.

First off - are your waffles going to be any cheaper if Apple didn’t charge that 30%, or charged lower (like 15%?). I don’t see this happening with many apps. Take Fantastical for example. I am subscribed through iTunes, and just renewed my subscription for the second year, meaning the developer keeps 85% instead of 70%. I am also still paying the same S$55 a year.

Second, I like that everything is in one store, which in turn allows me to to track my purchases and subscriptions all within one app. I like that Apple is able to use their leverage to get developers to implement features like ATT and Sign In with Apple.

Would you have been willing to do the same of your own volition?

Third, the App Store is the reason why I have purchased as many apps as I have over the years, even if I didn’t end up using all of them, because the process is just so frictionless. I don’t have to navigate to an external website, I don’t have to sign up for additional accounts or leave my payment details with third parties, it’s all just there.

I like that apple forces app developers to update their apps for new features. I like that they force apps to support their privacy protecting authentication. I like that they are strick about background usage. I like that they audit UIs, and enforce quality standards. I like that I can rely on apple pay working in every app. It is why I paid for an iphone over a cheaper alternative.

I could go on, but I think you are starting to see the point here.

In the midst of all this argument between Apple and developers, it feels like the voice of the consumer has been largely left unheard, and I think companies like Epic and Spotify are hesitant to bring in our voices for one very simple reason - we don’t actually hate walled gardens, because of the benefits they bring to us end users.

To me, buying an iphone is like joining a union. There are annoying parts, but as a whole it gives users a collective voice to force app makers to behave. If there are rival app stores then the user base can be divided, losing power to app developers.

After all, the App Store exists just as much for consumers as it does for developers, does it not?

And that, I feel, is the real problem for developers. From an end user's perspective, Apple is correct.

I’m beginning to feel sorry that I started the whole waffle thing

 

[Abazigal]

I’m beginning to feel sorry that I started the whole waffle thing

Take it for what it is - an opportunity to enunciate and refine our own ideas and beliefs.

 

[Analog Kid]

I’m beginning to feel sorry that I started the whole waffle thing

Never, and I mean never, apologize for waffles.

 

[DoubleJ2119]

Deleted.

 

[Apleeseed84]

I hate walled gardens, I buy an apple product for reliability and efficiency, they stand behind their products, almost all devices are the same thing, phone, music player, high tech cameras but the same apps. All apps spy on you so they can “improve” there’s no cutting around the bush it, all starts when they ask for you number.

I have been here for the App Store since day 1 and it’s worse off now TBH, innovative apps and games were created back in the early 2010’s, a majority of them disappeared and now we got the scraps.

 

[Analog Kid]

innovative apps and games were created back in the early 2010’s, a majority of them disappeared and now we got the scraps.

Can you think of any offhand?

 

[Apleeseed84]

The Aston Martin Experience comes to mind, it let you use your cellphone as a makeshift telemetry device Along with interactive features that was like an amazing Digital Car Brochure.
Bio shock, Metal gear solid touch, The simpsons arcade, tony hawk’s pro skater 2, Flight Control, My old casino slots games, Driver, Ace Combat Xi Skies of Incursion, the entire Amateur Surgeon series
FileApp Pro when they let us explore our internal memory, a big on my list Coaster Crazy Deluxe, off the top my head

 

[cmaier]

Can you think of any offhand?

I am Rich was pretty innovative /s

 

[Analog Kid]

I am Rich was pretty innovative /s

😄 Funny that our minds went to exactly the same app. Turns out we overshot the mark. I thought of that and when fart apps were racing each other to the patent office, but those were pre-2010. I can't think of anything specific to the 2010s...

 

[Analog Kid]

The Aston Martin Experience comes to mind, it let you use your cellphone as a makeshift telemetry device Along with interactive features that was like an amazing Digital Car Brochure.
Bio shock, Metal gear solid touch, The simpsons arcade, tony hawk’s pro skater 2, Flight Control, My old casino slots games, Driver, Ace Combat Xi Skies of Incursion, the entire Amateur Surgeon series
FileApp Pro when they let us explore our internal memory, a big on my list Coaster Crazy Deluxe, off the top my head

Those seem like pretty standard fare, and the kind of stuff you can still find in the AppStore today. I think the only one I used myself was Flight Control, which I freaking loved. It disappeared because it was bought by EA and they left it to die. I can see how a policy change may have killed FileApp Pro, if Apple blocked memory access, but what about the AppStore drove the others out?

I dug around for information on the Aston Martin app, and that dashboard mode seemed novel at the time. I think there's a few apps out there now that have taken that idea and built on it. Sygic, has a nice interface, for example.

I think the rate of innovation in apps has slowed, mostly because there's so many available already and the underlying technologies have matured, but I don't think we're worse off.

 

[deevey]

I don’t think Apple should be taking a cut unless they’re directly responsible for the sale. I honestly can’t remember the last app I downloaded or purchased because of Apple marketing/promotion. I think assessing developers for the cost of maintaining the App Store, app downloads, software SDKs/tools, developer relations etc. is one thing. Rent seeking is completely different and Apple should get out of that business. Of course some will argue there are exceptions - especially around games - where Apple can say you wouldn’t exist without us and therefore if you’re successful we deserve some of it.

If you have ever searched for an App and paid for it, or a subscription via IAP, when there was another route that could have been taken, thats a direct result of Apples marketing.

But Apple getting a cut of Kindle book sales just because you read them on an iPad is ridiculous. Amazon should be able to allow people to buy a kindle book inside the app without having to pay Apple.

Apple is not getting a cut because you read the book on their platform. They are getting a cut because their platform make an impulse sale for that book possible rather than being brought out-of-app, and losing the sale due to loss of interest / cart abandonment in those seconds going out-of-app, entering your credit card details etc..

Just let people use the same Amazon account that they do for physical goods or when they use Amazon’s website. Browsing for a book inside the app and then having to go outside the app to pay for it is just poor user experience.

Exactly! A sale that is a result of IAP's, on their platform, in an app hosted on their store that makes impulse sales possible, in turn makes Apple being directly responsible for the sale and they should take a cut.

Amazon obviously know the value as well or they would simply pull IAP's and revert to only allowing sales via their website and pay enormous amounts of money on marketing instead promoting sales soley through their website.

 

[bgillander]

Oh this should be a fun analogy.

suppose I don’t mind, but I demand 30% of your revenue. If you sell $1 MM worth of waffles, so you think it’s reasonable that it cost you $300,000 to rent a lawn?

Oh and by the way, you can’t sell any of your waffles anywhere else, especially a neighbors lawn if (god forbid) they offer to charge you less. So you either sell your waffles on my lawn and on my terms, or you don’t sell at all. Aren’t you grateful to me?

So by using your lawn I make $700,000? Sounds like a great deal. Especially if the other lawn I could have used would make me less than $100,000 because hardly anyone there felt like buying waffles. What I’m trying to figure out is why there is all this sympathy for big developers that are selling more than $1,000,000. They are getting 70%, so why exactly are they deserving of more? I sort of get the arguments some have for freeware developers, but development environments used to cost a lot (actually, many still do) and $99 a year is a pretty low barrier of entry, even for a small developer.

 

[Rogifan]

I’m pretty sure they’ve been saying this from the beginning. “We’re putting you in front of every iPhone user” was part of Jobs’ initial presentation. The growth in services revenue has been the headline after most earnings calls, so I don’t think they’re hiding (or should be embarrassed by) the fact that they’re earning a profit…

Maybe you’re being confused by the fact that people in the comment section keep trying to make Apple appear way shadier than they are?

That’s not usually what they say when they’re defending IAP. They usually trot out privacy and security BS.

 

[Rogifan]

Though they aren’t perfect substitutes, Apple would be put at a competitive disadvantage if they were using hardware sales to significantly subsidize the App Store because other phone companies wouldn’t do this and instead be able to price their phones significantly below the iPhone, making the iPhone uncompetitive on price. App Store prices may not even be lower though because developers would still charge whatever the market will bear.

Seems to me the issue isn’t App Store prices. This is one reason Apple is able to get away with what it’s doing. This is a developer issue way more than a iOS customer issue. Consumers aren’t complaining about prices because most apps are free/free with ads. So as long as people keep buying iOS devices and using the App Store Apple isn’t going to change much. I have noticed though that paying to get rid of ads in apps has gotten more expensive. You used to be able to do it for something like $1.99 now in some game apps I’ve downloaded it’s $5.99 to remove ads.

 

[Rogifan]

If you have ever searched for an App and paid for it, or a subscription via IAP, when there was another route that could have been taken, thats a direct result of Apples marketing.



Apple is not getting a cut because you read the book on their platform. They are getting a cut because their platform make an impulse sale for that book possible rather than being brought out-of-app, and losing the sale due to loss of interest / cart abandonment in those seconds going out-of-app, entering your credit card details etc..


Exactly! A sale that is a result of IAP's, on their platform, in an app hosted on their store that makes impulse sales possible, in turn makes Apple being directly responsible for the sale and they should take a cut.

Amazon obviously know the value as well or they would simply pull IAP's and revert to only allowing sales via their website and pay enormous amounts of money on marketing instead promoting sales soley through their website.

How is me searching for an app in the App Store a result of Apple’s marketing? I’m not searching for the app because Apple said hey this is a great app go download it. As far as IAP, the only IAP I’ve done in-app in a long time is paying to remove ads. Again I don’t know what that has to do with Apple marketing. And I’m not sure what you’re referring to with Amazon. Their iOS Kindle app doesn’t allow sales inside the app, precisely because they don’t think Apple deserves 30% of that sale. I think forcing users to have to go to Amazon’s website to buy a book and then go back to the Kindle app to download and read it is poor user experience. Though I’m sure Apple’s answer would be use the Books app or we’d allow it if Amazon gave us 30% of book sales. Of course Apple doesn’t really think they deserve 30% of Amazon book sales otherwise they wouldn’t have allowed Amazon to have a ‘reader’ category app that doesn’t allow IAP. Apple doesn’t care if users are inconvenienced.

 

[DailySlow]

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.

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.To establish a settlement, Apple and the developers involved in the lawsuit have come to an agreement that "identifies us 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.

CAMERON, ET AL. v. APPLE INC. 2 by MacRumors on Scribd on Scribd



CAMERON, ET AL. v. APPLE INC. by MacRumors on Scribd on Scribd​

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

Apple created the app store system, built it, and maintains it (at considerable cost) while enforcing a good level of security. The service has been a boon for the mobile ecosystem and Apple hardware of course. I have no problem with its content and strictures. I am not a developer by any means but a fervent user (and of course customer : ). At the same time have used the other major platform offshore traveling and hated every minute of it for it’s time stealing chaotic inconsistency, unsettling vulnerabilities and divergent system update attention requirements that are shoveled onto me - which Apple’s system keeps out of the way. There is indeed a tradeoff with a loose(r) system and that’s my time and ease of mind. I am against eroding that.

 

[jlc1978]

Consumers, as long as developers implement the functionality, have the option of completely bypassing Apple’s commission in every app now via a website. Developers get 100% of their revenue minus card transaction fees from said transactions.

My guess is Apple will find other ways to recoup lost revenue, costing developers more upfront than they currently pay.

Developers can also use phone numbers and email addresses collected within the app to market this fact to their customers.

Just what end users need - more spam and having someone sell my info. Apple will, i hope, make letting a developer get your contact info to spam you opt-in vs. opt-out.

This is important for customers that may prefer to pay less for in-app content over Apple’s system.

You're assuming developers will charge less. My opinion, based app pricing patterns, is developers will simply pocket the difference.

 

[jlc1978]

f I bought a blender at Target and the manufacturer had a service whereby you could purchase ingredients to make healthy shakes should target get a cut of that sale or should they get nothing once you walk out of the store with that blender?

If you buy the ingredients from target, yes target gets a cut.

Obviously software is different and developers are using tools/resources Apple develops and maintains but I’m talking about specifically what Apple deserves from a customer acquisition stand point. To me customer acquisition and developer tools/support are two separate things and should be accounted for differently.

I think developers would not prefer Apple to separate the two and significantly increase the costs of tools, hosting apps, etc.

What huge concessions? Seems like they gave up virtually nothing. The critics didn't really get what they wanted....did they? A few cents here and there and some grants... Notice, they didn't really get anywhere on the monopoly thing.

Maybe because the app store is not a monopoly?

This is key. If Epic has their way, they would be eliminating choice. Many consumers of Apple products, perhaps the vast majority, bought said products in large part due to Apple closed ecosystem because we are believers in the notion that “simplicity is the ultimate sophistication.” To take that away from us, using the legal system of all things, is simply tragic. Furthermore, it is being done in the pursuit of pure business interest (Epic wants to fragment the way we search for and download apps by launching their terrible Epic Games Store on iOS, luring developers with exclusivity deals, and collecting their own profits from developers), not some kind of moral conviction.

Exactly. It's about who gets all the money. Epic wants a free ride on Apple's success.

 

[Ethosik]

Ironically the very thing you're arguing for is the same thing as (you use my property to sell the app therefore I want compensated for it) Taking it a stage further, it's like saying, here use my property, but don't pay me anything just pay the neighbour down the street that I've no relationship with.
This cluster**k is exactly why the app store was introduced in the first place. If you can remember back to pre-iPhone all mobiles/carriers had their own respective stores that didn't do so well as was locked to regions & the apps were garbage with no recourse when things went wrong - would you rather have a small bit of a big pie or a bit bit of a small pie? 'cause that's what it was like.
I don't want developers spamming me with emails so that but will be getting declined.
I haven't read the ins & outs of it, but of course could be missing a trick, they could use the email comms using their iCloud email aliases, that'd keep the developers happy & as there's still lock-in to their service, but again folk would probably still moan about that I guess.
I really really hope we don't return to the world of sideloading apps as that's just a bag of hurt waiting to happen all over again.
When the app store started it was deemed that the developer 30% cut on the balance of probability was a fair one as retail software was way less & the geographical reach was nowhere near what we have today.

That is the problem with smart TVs. They each have their own apps and stuff that rarely gets updated. The YouTube and Netflix apps on my Smart TV are HORRIBLE, which is why I use an Apple TV.

 

[Ethosik]

True... but whose fault is that?

Apple could take a 0% cut and many (most?) developers would still struggle to make $10,000 a year.

It's all about the apps themselves, right? And you gotta know the audience.

Someone's little calendar app might make almost no money... while the latest "Clash of Clans" or "Candy Crush" will make $1,000,000 a month.

¯\_(ツ)_/¯

Yes, sometimes the entitlement is ridiculous. I am not yelling to take down Microsoft or Sony because my video game doesn't get as many sales as the Halo or Horizon Zero Dawn games.

 

[Ethosik]

Nobody’s saying Apple device owners can’t stick with just downloading their apps from the Apple App Store and paying extra for the app or signing up for subscriptions paying extra for the Apple % it charges the developer to subscribe in that manner. But not allowing people to install non apple app stores or at least paying for the app or subscribing for it any other way is anti competitive.

That is exactly what is going to happen if multiple App Stores are allowed. Just look at the state of PC gaming. There are games that ONLY exist in the Epic Games Store - and there are rumors that Final Fantasy 7 Remake is going to be exclusive to the Epic Store. Now, similarly to the iPhone example, how would I be able to install that game from Steam? I can't. Games will ONLY be available in Epic. I have NO CHOICE but to create an Epic account and buy it from their platform. The same is going to apply to the iPhone. You think Fortnite will remain on Apple's App Store? It won't, and Epic will buy up exclusive deals like they are on PC instead of having just normal competition.

Now, I WILL agree with you that if somehow Apple is forced to do something like this that Playstation, Xbox and Switch should be required as well. I don't want this to turn into playing favorites, or I guess the opposite. Everybody apparently hates Apple so lets force them and ONLY THEM to have these rules. That is not right. Make it a rule across the board.

 

[Ethosik]

They'll still have to pay 3% to Square, Stripe, PayPal, or whatever... but it's better than 15% or 30% to Apple.

Marco could get a lot more of my $9.99/year Overcast Premium fee if he handles the payment himself and lets me log into the app with my account.

Time is also money. If you are big enough you might have to deal with some payment disputes. I have contacted Apple Support on a couple of apps through the years. You think Apple would support them if they are third party? That means I would need to contact the developer directly. Which means if you are even somewhat successful, you might need to hire a dedicated person to handle these. So their salary and benefits would end up potentially costing more than just having Apple do this.

 

[Ethosik]

But wasn't Epic's main issue that Apple was taking 30% of every VBucks purchase?

Actually Epic does have an argument here. Physical stores can not add tax on gift cards, and they do not take a percentage of the cost. An iTunes gift card at Target for $50, I get $50 in my iTunes account. I am sure there are SOME COSTS like physical storage space in the racks of gift cards. But this is where digital and physical differs. It is theoretically infinite space to have these "gift cards" in digital format. Epic can make the argument the in app purchases for VBucks is equivalent to buying a gift card at a physical store.

 

[Ethosik]

So it’s ok for Apple to have a monopoly over what apps we can have on our devices? My favorite app developer decides they’re done with the Apple App store and I have to go buy an Android device?

Why would that be an issue? Are you up for forcing any developer to make an app they do not want to make? I am in the process of making a pretty large Windows game, should I somehow be forced to create a macOS version too? Or if later down the line I want to drop my Windows version and move the macOS exclusively, why can't I have that choice? Its my game, not yours. Its my company not yours.

 

[Ethosik]

Be realistic. No developer in their right mind is, nor should they, not sell their apps on one of the two top app stores in the world unless they can’t make any profit.

Apple’s App Store and app installation, forced subscription policies have been anti competitive not sure why people in here are defending them but it will be interesting to see if these concessions are enough to keep the walls up.

You would think so, but Epic is doing it pretty well on PC. Steam is THE PLACE for PC games. Its like going up against the Apple App Store on the phone. Yet Epic is handling exclusives so some games are NOT in the largest store on computers.