TOPLINE Apple has agreed to make some changes to its App Store policy as part of a proposed lawsuit settlement which will enable developers to contact customers about alternate payment methods for in-app transactions that will allow them to circumvent Apple’s sizeable commission fee, a move that comes at a time when the iPhone-maker is facing major antitrust and legal challenges around the world.



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



Is a&nbsp;<a href="https://www.apple.com/newsroom/2021/08/apple-us-developers-agree-to-app-store-updates/" target="_blank" rel="noreferrer noopener">press release</a>, Apple says it will allow app developers to reach out to their iPhone and iPad customers via email or other communication channels to inform them about alternate payment methods that don’t carry Apple’s fee—something Apple previously did not allow.



One caveat to this allowance is that users will need to consent to the communication and they will have the right to opt-out of receiving such communications.



The proposed settlement also expands the number of price points that developers can charge for subscriptions, in-app purchases, and paid apps.



Apple has also agreed to create a $100 million fund for payouts to small app developers.



The iPhone-maker has also agreed to not raise its commission rate for small developers—which it slashed from 30% to 15% last year—for at least three years.



The proposed changes will have to be approved by a U.S. federal court judge who is also presiding over Epic Games’ lawsuit against Apple.



<h2 class="wp-block-heading" id="h-chief-critic">CHIEF CRITIC</h2>



The Coalition for App Fairness—a group that includes the likes of Spotify and Epic Games as its members issued a&nbsp;<a href="https://appfairness.org/coalition-for-app-fairness-statement-on-apples-sham-settlement-offer/" target="_blank" rel="noreferrer noopener">statement</a>&nbsp;dismissing Apple’s settlement offer as a “sham.” Meghan DiMuzio the executive director of the group said: “Apple&#8217;s sham settlement offer is nothing more than a desperate attempt to avoid the judgment of courts, regulators, and legislators worldwide… If this settlement is approved, app makers will still be barred from communicating about lower prices or offering competing payment options within their apps.”



<h2 class="wp-block-heading" id="h-crucial-quote">CRUCIAL QUOTE</h2>



“We truly are proud that a case brought by two developers, standing in the shoes of tens of thousands of U.S. iOS developers, could help to bring about so much important change,” Steve Berman, a lawyer for the plaintiffs in the suit,&nbsp;<a href="https://www.nytimes.com/2021/08/27/technology/apple-settles-app-store-lawsuit.html" target="_blank" rel="noreferrer noopener">told</a>&nbsp;the&nbsp;New York Times.



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



Apple’s settlement appears to be a rather minor concession from the world’s richest company as its App Store business practices face&nbsp;<a href="https://www.forbes.com/sites/siladityaray/2021/08/25/south-korea-lawmakers-back-legislative-action-to-curb-google-and-apples-app-store-fees/?sh=7c082ba01813">increasing antitrust scrutiny</a>&nbsp;worldwide. Some app makers, like Spotify, already&nbsp;<a href="https://support.spotify.com/us/article/apple-payments/" target="_blank" rel="noreferrer noopener">block new customers</a>&nbsp;from signing up for subscriptions inside their iOS app. In the past, the music streamer has also&nbsp;<a href="https://www.theverge.com/2015/7/8/8913105/spotify-apple-app-store-email" target="_blank" rel="noreferrer noopener">sent out emails</a>&nbsp;urging existing subscribers to ditch Apple’s payment system for a discount. Apple’s new proposal will simply formalize this for all developers. The company, however, made no concessions about payment methods within iOS itself, and app developers are still forced to only use Apple’s payment system for all in-app transactions taking place on an iPhone or iPad. The proposed settlement comes at a time when Apple is awaiting a decision from a federal judge in a separate lawsuit filed by Fortnite-developer Epic Games which seeks to allow developers to circumvent Apple’s App Store commissions altogether.



<h2 class="wp-block-heading" id="h-tangent">TANGENT</h2>



On Wednesday, a South Korean parliamentary committee&nbsp;<a href="https://www.forbes.com/sites/siladityaray/2021/08/25/south-korea-lawmakers-back-legislative-action-to-curb-google-and-apples-app-store-fees/?sh=7c082ba01813">voted</a>&nbsp;to move forward a key legislative amendment that would ban Apple and Google from forcibly charging app developers a commission on all add-on purchases by requiring them to use their proprietary payment systems. Previously this month, a group of bipartisan U.S. senators&nbsp;<a href="https://www.reuters.com/technology/us-lawmakers-introduce-bill-rein-apple-google-app-stores-2021-08-11/" target="_blank" rel="noreferrer noopener">introduced</a>&nbsp;a similar bill that would bar companies from forcing their payment system on app developers. Last year, the European Union&nbsp;<a href="https://www.forbes.com/sites/siladityaray/2020/12/15/new-eu-rules-could-fine-us-tech-giants-billions/?sh=5db2712f6a54">unveiled</a>&nbsp;a set of proposals that would force the likes of Apple and Google to divest parts of their business if they fail to adhere to fair competition rules.



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<a href="https://www.nytimes.com/2021/08/27/technology/apple-settles-app-store-lawsuit.html" target="_blank" rel="noreferrer noopener">Apple Settlement Gives App Developers a Way to Avoid Its Commission</a>&nbsp;(New York Times)



<a href="https://www.reuters.com/technology/apple-will-change-app-store-practices-after-settlement-with-small-developers-2021-08-27/" target="_blank" rel="noreferrer noopener">Apple strikes App Store deal with small developers as it waits for &#8216;Fortnite&#8217; ruling</a> (Reuters)



By Siladitya Ray, Forbes Staff

American multinational technology company Apple store seen

Apple Agrees To App Store Policy Changes In Settlement With Small Developers As Antitrust Threat Looms

Apple aficionados have learned to wait for the end of its product announcements for the most tantalizing news: the &#8220;one more thing&#8221; that Steve Jobs would toss off, almost as an afterthought, and send the audience into a frenzy.



This time, the finale of Apple&#8217;s long-anticipated announcement launching its Apple TV+ video subscription service Monday in Cupertino — the signature moment that brought some in the audience to their feet — took human form. Oprah Winfrey strode on stage wearing Apple-white and, as the applause died down, responded with a comically understated, &#8220;Hi.&#8221;



Winfrey talked publicly for the first time about her multi-year deal with Apple — a partnership CEO Tim Cook has referenced frequently, if vaguely, on earnings calls with the Wall Street analysts. 



The talk show host turned media executive said she&#8217;s working on a documentary dealing with the sexual harassment and assault in the workplace, currently titled&nbsp;Toxic Labor,&nbsp;and an untitled multi-part series exploring mental health issues.



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&#8220;The Apple platform has allowed me to do what I do in a whole new way — connecting people and taking it to a whole new level, because they have a billion pockets y&#8217;all,&#8221; Winfrey said, a reference to the 1.4 billion Apple devices in use around the world that some analysts believe give its streaming service a competitive edge over established rivals, such as Netflix.



Winfrey was the headliner at an event packed with Hollywood celebrities. Director Steven Spielberg took the stage for his inaugural appearance at an Apple event to talk about his revival of the anthology series&nbsp;Amazing Stories.&nbsp;



Actors Reese Witherspoon and Jennifer Aniston touted their new project,&nbsp;The Morning Show,&nbsp;which explores the power and gender dynamics of morning news shows — an opportunity so appealing, the&nbsp;Friends&nbsp;star said it brought her back to TV.



Director J.J. Abrams shared the stage with Grammy-nominated artist Sara Bareilles to tout their collaboration on&nbsp;Little Voice,&nbsp;a show about a young, flawed artist finding her voice. Kumail Nanjiani of the HBO series&nbsp;Silicon Valley&nbsp;will explore immigrant stories in the series&nbsp;Our Little America.&nbsp;Even&nbsp;Sesame Street&nbsp;staple Big Bird stepped into the spotlight to announce a children&#8217;s series called&nbsp;Helpsters.



READ MORE |<a href="https://www.forbesafrica.com/current-affairs/2019/01/30/apple-lowers-some-iphone-prices-outside-us-to-offset-strong-dollar/" target="_blank" rel="noreferrer noopener" aria-label="Apple Lowers Some iPhone Prices Outside US To Offset Strong Dollar (opens in a new tab)">Apple Lowers Some iPhone Prices Outside US To Offset Strong Dollar</a>



Apple spelled out its broad ambitions for the forthcoming streaming service, saying it had partnered with the most accomplished storytellers as it seeks to define Apple TV+ as a home for quality entertainment. The tech company did more showing than telling at the Steve Jobs Theater Monday — each celebrity presentation was notably devoid of trailers.



It&#8217;s possible that the marking impresarios at Apple are holding their promotional firepower until a date closer to the Apple TV+ launch. Today&#8217;s event serves as a placeholder, staking Apple&#8217;s claim on the TV landscape ahead of the Walt Disney Co.&#8217;s April 11 investor briefing to discuss details of the Disney+ streaming service, or the television industry&#8217;s Upfront presentations, showcasing the fall schedule.



The Apple TV+ service will launch sometime this fall — though pricing has not been announced. It will be available through an updated version of the Apple TV app that&#8217;s already on millions of iPhones, iPads and Apple TV streaming devices. A new version of the app, due out in May, will work like a cable-TV service, where users can choose which TV channels they want to pay for and watch, including HBO, Showtime and Starz.



On the same day as Apple&#8217;s big announcement for original programming,&nbsp;Bloomberg reported&nbsp;that Google has cancelled plans for big budget scripted shows on YouTube. Google&nbsp;denied claims&nbsp;from Bloomberg sources that said the tech giant stopped accepting pitches for original scripts, but confirmed plans to launch ad-supported programming alongside YouTube Premium, $11.99-per-month ad-free access to YouTube Music and original content.



-Dawn Chmielewski; Forbes Staff

Tag: Apple TV+

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Apple Agrees To App Store Policy Changes In Settlement With Small Developers As Antitrust Threat Looms

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