Apple Strikes App Store Deal With Small Developers as It Waits for Fortnite Ruling

Apple, however, kept intact the vast majority of the App Store business practices that have been challenged in courts and legislatures.

Advertisement
By Reuters | Updated: 27 August 2021 09:58 IST
Highlights
  • Apple said it will make changes to the App Store
  • Developers have long been able to take other forms of payment
  • Apple maintains strict rules against developers using contact information

Apple is waiting for a decision in the higher-profile antitrust case filed by Fortnite creator Epic Games

Apple on Thursday agreed to loosen App Store restrictions on small developers, striking a deal in a class-action lawsuit as the iPhone maker awaits a ruling by the same judge in a separate App Store dispute brought by the developer behind Fortnite.

The deal includes changes in how all developers can communicate with customers, an issue highlighted by the judge herself in the Fortnite case.

Advertisement

But Apple kept intact the vast majority of the App Store business practices that have been challenged in courts and legislatures. Instead it gave up only $100 million (roughly Rs. 740 crores), a small sum for a company worth more than $2.4 trillion (roughly Rs. 1,78,00,210 crores), and a set of email marketing restrictions that legal experts had said could be difficult to defend even under a prior US Supreme Court case that allows companies to bar their business partners from steering customers toward alternative payment methods.

A group of smaller software developers brought the lawsuit in 2019, alleging that Apple broke antitrust laws with practices such as charging commissions of up to 30 percent. The Cupertino, California-based company said it has reached a proposed settlement that covers US developers that made $1 million (roughly Rs. 7.4 crores) a year or less under which the developers release all claims that Apple's commissions were too high.

Advertisement

Apple is waiting for a decision in the much higher-profile antitrust case filed by Fortnite creator Epic Games. The proposed settlement on Thursday will need approval from Judge Yvonne Gonzalez Rogers of the US District Court for the Northern District of California, who is expected to hand down a decision in the Epic case.

As part of the Thursday deal, Apple said it will make changes to the App Store, including extending for three years a change made last year that lowers commissions for smaller developers to 15 percent.

Advertisement

Developers have long been able to take other forms of payment outside of their apps to avoid commissions to Apple, and some, like Netflix eschew Apple's in-app payment system.

But Apple maintains strict rules against developers using contact information gleaned from customers who sign up via the App Store to later tell those customers about alternative payment methods, which are often priced lower because they do not require fees to Apple.

Advertisement

Smaller developers without Netflix's name recognition have long objected that Apple's restrictions prevented them from establishing direct billing relationships with customers.

During the Epic-Apple trial in May, Gonzalez Rogers had criticised Apple's rules, even though Epic had not made them a centerpiece of its case.

"Apple's hiding of that information in a way that is not directly reflected to the consumer seems to be anticompetitive," she said.

Apple said the changes will apply to all developers globally, not just the class of smaller developers in the United States covered directly by the settlement. The company will also create a $100 million (roughly Rs. 740 crores) assistance fund for small developers.

Steve Berman, managing partner of Hagens Berman, which represented the developers in the case, said the settlement would bring "meaningful improvements."

© Thomson Reuters 2021

 


Are the Galaxy Z Fold 3 and Z Flip 3 still made for enthusiasts — or are they good enough for everyone? We discussed this on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.
Affiliate links may be automatically generated - see our ethics statement for details.
 

Get your daily dose of tech news, reviews, and insights, in under 80 characters on Gadgets 360 Turbo. Connect with fellow tech lovers on our Forum. Follow us on X, Facebook, WhatsApp, Threads and Google News for instant updates. Catch all the action on our YouTube channel.

Further reading: Apple, App Store, Epic Games app, Fortnite
Advertisement

Related Stories

Popular Mobile Brands
  1. Oppo Find X9 Ultra Roundup: Launch Date, Design, Colourways, Specifications
  2. Ek Haseen Saazish Kasak OTT: Know When, Where to Watch the Romance Thriller
  1. Rocket Lab Sends Up Test Satellites for Europe’s Next-Gen Navigation System
  2. Zootopia 2 Is Now Streaming: Know Where to Watch the Disney Cop Comedy Sequel
  3. Ek Haseen Saazish Kasak OTT Release: Know When and Where to Watch the Romance Thriller
  4. Vadh 2 Streaming Now: Where to Watch Neena Gupta, Sanjay Mishra’s Crime Thriller
  5. Scientists Identify 45 Earth-Like Planets Beyond Our Solar System
  6. Euphoria Is Streaming Online: Know Where to Watch Sara Arjun's Social Thriller
  7. Valathu Vashathe Kallan Is Now Streaming: Know All About Jeethu Joseph's Crime Thriller
  8. Band Melam OTT Release: Know Where to Watch the Telugu Romantic Musical Film
  9. Microsoft Releases New AI Models That Can Generate Images, Audio and Transcribe Text
  10. Redmi K Pad 2, New Redmi Laptops Tipped to Launch Alongside Redmi K90 Ultra
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2026. All rights reserved.