Direct contact between developer and customer
The new rules are a result of the settlement in an almost two-year lawsuit that two American app developers had started. It has nothing to do with a similar case between Apple and Epic, which is still pending. Apple is loosening the rules for the App Store a bit: from now on developers can actively approach users to inform them about cheaper options to use an app. It mainly affects apps with long-term subscriptions, where companies have to pay 15 to 30 percent to Apple. If consumers close this directly via the developer's website, this commission can be omitted. It gives developers the opportunity to offer cheaper subscriptions or earn more from them.
Apple talks about ‘communication tools’ which the developers may use to inform customers, for example by e-mail. Direct promotion of alternative payment options within the app itself is not yet allowed. Also, no own payment methods may yet be built into the apps.
Settlement proposal
For the time being, it is a settlement proposal, which judge Yvonne Gonzalez Rogers still has to judge on October 12. She also heads the Epic case. The developers who started the business say “happy and proud” about the announced plans. Until now, developers were not allowed to use customer data received through apps. Under the new rules, this is allowed, although users must give explicit permission to use the contact details.
Developer fund
Apple will also set up a $100 million fund for app developers called the Apple Small Developer Assistance Fund. This fund will pay out between $250 and $30,000 to small developers. The amount they get is dependent on their “historical participation in the App Store ecosystem”. It only applies to small developers from the US with less than 1 million sales per year in the App Store.
Other settlement highlights:
- Apple is going to be more flexible in pricing to make. There are now less than a hundred price tiers for apps (such as 0.99 and &1.99) but that will be 500. Developers can still set their own price level. This change will take effect on December 31, 2022.
- The App Store Small Business program will continue in its current form for at least another 3 years. This means that developers with less than $1 million in revenue only have to pay 15%.
- At developers' request, Apple will still base the search results in the App Store on objective properties for the next 3 years, such as the number of downloads, star ratings, relevant search terms and user behavior.
- Apple maintains the ability to appeal an app rejection, based on unfair treatment. Apple has put extra explanations on the App Review website to explain the process.
- Apple will release an annual transparency report that provides useful information about the app review process, number of rejected apps, reasons for this, number of disabled customer and developer accounts and numbers of apps removed from the App Store.
The proposed App Store changes will apply worldwide, while the relief fund is only intended for Americans. Speaking on behalf of the developers who filed the case, Attorney Steve Berman:
We are truly proud that a case brought by two developers, who are standing in the shoes of tens of thousands of US iOS developers, brought about so much significant change.
The case goes back to 2019, when two developers filed a class-action complaint against Apple, alleging that the App Store's monopoly was causing “profit killing” commissions for app makers. Meanwhile, Apple isn't quite done yet: There is widespread dissatisfaction with the App Store rules, both among governments and developers themselves. Some want to be able to use their own payment system, others want third party app stores to be set up.
The Coalition for App Fairness has already responded to the plans and is unimpressed. They believe that nothing will actually change.