Apple settles an App Store lawsuit. What’s next?

Apple is paying $100m to developers who have paid “excessive commissions” and letting them email users about alternative payment options. Is it enough?


August 30, 2021

It’s a full-time job keeping up with Apple’s corporate beefs.

The iPhone maker is facing legal heat from Epic Games (“Fortnite” maker), Match Group (Tinder owner), Facebook, and others for how it runs the App Store.

At least one battle is almost over

Last week, Apple settled a federal case — launched in 2019 — that charged the tech giant with monopoly power over its App Store.

The company agreed to pay $100m to US developers who paid “excessive commissions” on their apps between June 2015 and April 2021, per The Wall Street Journal.

The settlement is only for developers making less than $1m per year, and the headline number is sad when you break it down: Some may receive up to $30k, but 74% will get $500 or less.

Apple will also have to loosen restrictions…

… on “anti-steering rules,” which dictate what developers can do with user data. One big change: Developers can email users about alternative and (typically) cheaper payment methods outside of the walled iOS garden.

Apple still won’t let developers post those cheaper options inside the app, though.

Also unchanged: the App Store’s take rate on subscriptions (Year 1 = 30%, Year 2 = 15%) and in-app purchases (15% for <$1m and 30% for >$1m).

The App Store has 30m registered developers

And 1B+ customers spent $72B+ on apps in 2020, per WSJ. (Translation: $100m is a drop in the bucket.)

The settlement awaits court approval and developers can opt out. Many might, as accepting the terms means waiving any future legal action for similar App Store complaints.

Next up: Epic Games — which sued Apple over its in-app purchase system — is awaiting judgment. They’re probably hoping for a slightly better outcome.

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