Apple agrees to create $100M fund, make App Store changes to settle developer lawsuit

Apple on Thursday announced an agreement that settles a lawsuit brought by U.S. developers against App Store practices, with terms including the institution of a $100 million Apple Small Developer Assistance Fund.

Announcing the settlement in a pair of press releases, Apple and representatives for plaintiffs each focused on negotiations that will result in multiple changes and improvements to the App Store.

Apple said the agreement was in part a response to concerns from its developer community, a company representative said.

“From the beginning, the App Store has been an economic miracle; it is the safest and most trusted place for users to get apps, and an incredible business opportunity for developers to innovate, thrive, and grow,” said Apple Fellow Phil Schiller, the executive in charge of App Store operations. “We would like to thank the developers who worked with us to reach these agreements in support of the goals of the App Store and to the benefit of all of our users.”

One major policy modification pertains to developer communication. App makers can now reach out to customers via email and other methods — with consent — to discuss alternative payment methods, which if adopted would effectively avoid App Store commissions. In-app communication about such topics is still forbidden.

As part of the agreement, Apple will continue to offer reduced 15% commission rates for developers earning less than $1 million a year, figures that are pulled from the company’s Small Business Program. Those terms will carry forward for at least three years.

In addition, Apple is instituting a $100 million Small Developer Assistance Fund to assist small developers in the U.S. Depending on their size, companies that earned $1 million or less annually across all titles between June 4, 2015, and April 26, 2021, can claim between $250 to $30,000 from the fund. That group accounts for 99% of developers in the U.S., with large corporations like Netflix and Epic Games making up the remaining 1%, Apple says.

As for App Store changes, Apple has agreed to preserve Search functionality to show results based on “objective characteristics” that include downloads, star ratings, text relevance, and “user behavior signals.” This, too, will remain in effect for at least three years.

Developers are also getting more pricing options for their wares. App Store price points will expand from fewer than 100 to more than 500 for subscriptions, in-app purchases and paid apps, the company said.

Apple will continue to accept app rejection appeals and has agreed to update its App Review website with additional information on the appeals process.

Finally, an App Store Transparency Report is being readied for release and will include key statistics covering the app review process, the number of customer and developer accounts that were deactivated, the number of apps removed from the App Store and data regarding search queries and results.

Judge Yvonne Gonzalez Rogers needs to sign off on the agreement before the changes take effect.

Developing

Read more at AppleInsider

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