Apple will finally let developers notify customers of alternative payment options
Apple announced late last week that it is finally dropping its controversial “anti-steering” policy as part of a settlement it reached in a class action lawsuit. Before this announcement, Apple didn’t let app developers directly contact users informing them about alternate payment methods outside of their apps, but the Cupertino giant has now agreed to drop that controversial policy.
The updated App Store policy will no longer prohibit developers from directly contacting their users with information about non-Apple payment options, thus avoiding Apple’s commission fee, which ranges from 15% to 30% fee on all App Store purchases. However, developers are still prohibited from communicating about competing payment options or lower prices within their iOS apps.
“To give developers even more flexibility to reach their customers, Apple is also clarifying that developers can use communications, such as email, to share information about payment methods outside of their iOS app. As always, developers will not pay Apple a commission on any purchases taking place outside of their app or the App Store. Users must consent to the communication and have the right to opt-out,” Apple said in a blog post.
This policy update comes in response to a lawsuit that was initially filed by two iOS app developers in mid-2019. The lawsuit asserted that Apple ran afoul of the Sherman Act and California’s Unfair Competition Law by monopolizing iOS app and in-app-product distribution services to charge app developers supracompetitive commissions. In mid-2021, the plaintiffs moved for class certification, and the law firm Hagens Berman Sobol Shapiro LLC was appointed as Class Counsel. Finally, late last week, Hagens Berman announced the details of the class action settlement it reached with Apple, resulting in numerous small concessions for iOS app developers.
Apart from dropping the aforementioned anti-steering policy, Apple will also create a $100 million fund for smaller app developers. Developers who earned less than $1 million a year from June 2015 to April 2021 can claim payouts from as low as $250 to as high as $30,000 from this fund, depending on historic proceeds from distributing apps on the App Store. The settlement website, www.SmallAppDeveloperAssistance.com, is not yet live at the time of publication.
Other changes that Apple has agreed to make to its App Store policy include keeping its lowered fee for app developers making less than $1 million for at least 3 years, improving search discovery, and “giving new and high-quality apps a chance to be found,” expanding the number of price points from 100 to more than 500, and publishing an annual transparency report containing statistics about the number of app rejections, the number of customer and developer accounts deactivated, the number of apps removed from the App Store, and more.
Responding to Apple’s proposed changes, Meghan Dimuzio, executive director of the Coalition for App Fairness, said (via the Washington Post) Apple’s offer did little to address the real issues: “Apple’s sham settlement offer is nothing more than a desperate attempt to avoid the judgment of courts, regulators, and legislators worldwide. This offer does nothing to address the structural, foundational problems facing all developers, large and small, undermining innovation and competition in the app ecosystem.”