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

[Michael Scrip]

They also have to deal with the risk that I don't want to pay them directly and will find an alternative app. I don't think developers understand that many of us want to do business with Apple, not them. Apple provides security knowing that if the developer misleads what their app does I can get refunded.

Ah yeah... there's that...

For the record... I, too, am partial to just letting Apple handle all the payments. I was just looking at it from the standpoint of the developer.

It'll be interesting how much, or if, this will change things in the long run.

 

[4jasontv]

Ah yeah... there's that...

I, too, am partial to just letting Apple handle all the payments.

It'll be interesting how much, or if, this will change things.

Yeah. Probably not much. But I will badmouth any developer who contacts me to let me know that they keep more of the revenue if I jump through their payment hoops.

 

[Gasu E.]

Flawed analogy. The lawn (the phone) does not belong to Apple. It belongs to a phone owner. It's the phone owner who needs to agree to install and app or an alternative app store. It should not have anything to do with Appleh

The physical phone belongs to the phone owner. But the copy of iOS that runs on the phone doesn't. It's just intellectual property with no physical manifestation; and all the phone owner has is a license to use it, granted by Apple, and subject to terms and conditions.

 

[JGIGS]

View attachment 1823888

Source: https://www.apple.com/app-store/developing-for-the-app-store/

Cool. And how much has apple made by just putting these apps on a server?

 

[Wildkraut]

I will only buy via the Apple payment system, I'm sure I'm not in the minority. I would rather pay a little more then having my CC info stolen.

Well, credit cards exist since the 50s,60s or so, seems like people managed to survive all those years pretty good without another man in the middle playing the savior.
Frauds will always exist, holding you back won’t increase your security, else you’re super strict from the beginning
of your CC usage. But I’m sure your gave your CC info already into multiple (offline & online) stores and also to contracts.
The security by obscurity train departed already, through social engineering and merging multiple data sources they’ll get your info anyway.

 

[4jasontv]

Cool. And how much has apple made by just putting these apps on a server?

One would hope magnitudes more, but I am not sure if we have a solid number.

 

[covidappantitrust]

Our company is filing an Objection to this settlement. $100 million, to settle 30% supra-competitive rents on $300 billion in developer payments? How is this math even plausible. The law firm here is getting $30m. Who paid them, and why do they get such a substantial amount on such a puny settlement. Also the settlement proposed is vague in many respects to related litigation. Look for our press release on the objection. Mark my words this settlement is dead in the water.

 

[6787872]

Yes, you should. You should have to pay money to make any software you expect to profit from. The fact that you don't doesn't change that you should.

go back and reread my post, particularly the second half, and try again.

 

[Wildkraut]

this is what developers forget about. You have a platform of millions of users - a good percentage that actually buy apps, the tools to develop said apps and lots of materials to reference, a billing system you don’t have to setup to accept credit cards, etc…. 30% is cheap!!!

I sell stuff on Amazon and barely make a profit after being robbed of huge seller fees.

I see the Internet as THE platform of millions of users, not the AppStore. The AppStore is just a gatekeeper. You can reach far more customers outside the ApoStore through Ads, Game review sites, etc. than from the AppStore build-in marketing.

 

[covidappantitrust]

Letter sent to Plaintiffs' attorney here:

Dear HBSLaw and Gibson Dunn,

I have been informed of a proposed settlement in the Cameron Case. I am a developer of several apps that are pending litigation in CAND as well. But my [trademark] app intends to join the class of Cameron.
However, the terms of settlement are , for lack of a better word, absurd. $100 million in an app market worth $80/billlion quarterly? This settlement is preposterous and truly gives the impression Apple has paid off the opposing counsel.
A maximum damage of $30,000 for my app? Who are you kidding?
This is outrageous and I intend to make the public aware of the total disregard your firms have for protecting my, the small developers', interests and fiduciary concerns.

Frankly this number is so appalling I will request an investigation by the California Bar into how such a suspicious payoff could be determined.

Please provide me with instructions, which I will relay to my lawyer [], as to any procedures your firm(s) have in place to register my objections to Settlement.
We do plan to appeal this to the Ninth Circuit if necessary, and SCOTUS, if still necessary. Justice should not be paid off here so improperly.

Thoroughly disappointed in your firms

 

[contacos]

The only thing I get from this is that Apple thought they could dictate what you send to your users outside of the AppStore like emails and it’s content??? Wtf we do that all the time 😅

 

[covidappantitrust]

The only thing I get from this is that Apple thought they could dictate what you send to your users outside of the AppStore like emails and it’s content??? Wtf we do that all the time 😅

Yes, the DPLA is a contract of adhesion that needs to go. Hopefully the pending Bipartisan Senate Bill, and similar bills in other countries, happen sooner rather than later. Apple is not the company I grew up with. My computer crashes like a Microsoft machine, and Apple wants to censor everything that can run on it now (look for new MacOS with App Store- like control). Nobody misses $.55/minute long distance from the AT&T break up, and nobody is gonna miss Apple.

 

[Wildkraut]

The only thing I get from this is that Apple thought they could dictate what you send to your users outside of the AppStore like emails and it’s content??? Wtf we do that all the time 😅

Good they didn’t notice, otherwise you would have a slashed back already. 😅

 

[Gasu E.]

Who knows, but right now it’s the end user paying the Apple tax not the developer.

Most likely not, per microeconomics. The developer should be pricing to what they think the market will bear; so the cut to Apple comes out of the developer's share, not from the end user due to a higher price "markup". Of course, if the Apple cut is too high for the developer, they won't make their product available at all; which is how the end-user would be penalized.

 

[H2SO4]

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.

Is that really true?
Without their system there will have been a different way to do things and you may have taken advantage of that but then you may not. Others certainly would.
There are lots of things I never thought I'd do and guess what, with improvisation, work, study etc sometimes you do end up being successful by achieving your goal using another method.

 

[4jasontv]

go back and reread my post, particularly the second half, and try again.

Are you referencing the incorrect statement about freeware hippies?

 

[bollman]

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?



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...

I'm struggling to think of a situation where the $99/year Developer Fee is a barrier to entry.

I for one think that the Developer Fee should be higher.
Apple should base it on your revenue instead.
$99 if you just starting up, but $99 if you are MS or Adobe is rather silly.

 

[JGIGS]

The physical phone belongs to the phone owner. But the copy of iOS that runs on the phone doesn't. It's just intellectual property with no physical manifestation; and all the phone owner has is a license to use it, granted by Apple, and subject to terms and conditions.

If any of those terms and conditions are anti competitive than you have an anti trust issue. Which judging by Apple’s recent changes they know the hammer was coming and are trying to avoid giving up even more in the future like third party app stores or side loading.

 

[Analog Kid]

Most likely not, per microeconomics. The developer should be pricing to what they think the market will bear; so the cut to Apple comes out of the developer's share, not from the end user due to a higher price "markup". Of course, if the Apple cut is too high for the developer, they won't make their product available at all; which is how the end-user would be penalized.

[adopts professorial tone, gestures to imaginary blackboard]

What "the market will bear" isn't the breaking point of the market or the point at which people stop buying the product, it's the profit maximizing point-- the point at which the volume*margin product is greatest.

The market settles to an equilibrium price-- when the number of units offered at a given price matches the number of units demanded at that price. There will be buyers willing to "bear" higher prices, but they won't need to because the equilibrium price is below their threshold, and there will be sellers willing to "bear" lower prices but they won't have to because the equilibrium price is above their threshold.

If the cost of business increases, it's not a binary available/not-available threhold. There will be fewer units available at that price-- the supply curve shifts left and the equilibrium settles at a lower quantity at a higher price.

Fewer units are sold and they're sold at higher prices. Consumers shift to substitution goods-- similar products that may cost less, either because they're lower quality, carry less brand value, etc, and suppliers make an effort to reduce the cost of their products by cutting their production costs (labor, materials, licensing, etc) or improving their technology to provide more value at less cost.

So the markup isn't paid by the user or the developer, it's absorbed by the market-- basically distributed between all the users as higher cost and all the developers as lower profit.

 

[JGIGS]

Is that really true?
Without their system there will have been a different way to do things and you may have taken advantage of that but then you may not. Others certainly would.
There are lots of things I never thought I'd do and guess what, with improvisation, work, study etc sometimes you do end up being successful by achieving your goal using another method.

Exactly. Some developers are just asking to at least have the choice. Seems pretty anticompetitive to not allow that choice.

 

[Analog Kid]

Exactly. Some developers are just asking to at least have the choice. Seems pretty anticompetitive to not allow that choice.

There is another choice: Android.

 

[jeffe]

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 stop at apps? Should Apple be forced to allow us to also replace iOS with Android on our devices as well?

 

[hot-gril]

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.

because Android users are poor or cheap, hence why they didn't just buy the premium phone

 

[m4mario]

What really happened here was lawyers took advantage of developers and tried to make some money screwing Apple. The 100 million is not a lot for developers. But it will get the lawyers a nice fat pay check.

No matter how much people complain, we must note that Apple and Google provide lot of tools, training and API’S to developers for free in exchange for the 15-30% cut. And the only way Apple can afford to remove the App Store fees, is by charging for the APIs and stop providing the free trainings, like Microsoft does. That might be great for large development house like Epic, but that will totally lock out small developers and will create an App Store with only large players like Epic/Adobe/Microsoft/Facebook. The Epic lawsuit is not to save small developers as Epic portrays it. It is to totally eliminate all small game developers, who are really Epic’s main competitors.

And small developers are being taken for a ride by lawyers, large development houses and tech media companies, for their own profits.

 

[JGIGS]

There is another choice: Android.

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.