Apple Agrees App Store Deal With Small Developers

Apple has made a major change to its strict App Stories rules and agreed to allow small app developers to email their users about alternative purchase options to the App Store billing.

Apple announced that this change will allow small developers to avoid the App Store fees, which range from 15 to 30 percent of gross sales, and means customers can pay developers directly instead.

For a long time Apple has defended its commission charge for apps that use its in-app payment system. It also imposes strict rules that apps must comply with, in order to appear in its App Store, which is the only venue where iPhone and iPad can download apps for their devices.

App Store changes

But changes have been happening.

In November 2020 Apple announced that the new App Store commission will fall from 30 percent down to 15 percent for small developers and businesses earning up to $1 million per year.

And in a further step, Apple announced on Thursday a new deal to resolve a class-action suit from US developers.

“The terms of the agreement will help make the App Store an even better business opportunity for developers, while maintaining the safe and trusted marketplace users love,” said Apple.

“The agreement clarifies that developers can share purchase options with users outside of their iOS app; expands the price points developers can offer for subscriptions, in-app purchases, and paid apps; and establishes a new fund to assist qualifying US developers.”

Previously, Apple prohibited app makers to steer users through email to their websites to pay for digital products.

“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 Phil Schiller, Apple Fellow who oversees the App Store.

“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,” said Schiller.

Specific steps

So what exactly is Apple agreeing to?

Well in essence Apple and the developers agreed to maintain the program in its current structure for at least the next three years.

This means that businesses earning less than $1 million annually will continue to benefit from the reduced commission, while larger developers pay the App Store’s standard commission on app purchases and in-app payments.

Apple is also to allow developers to use communications, such as email, to share information about payment methods outside of their iOS app.

As always, developers will not pay Apple a commission on any purchases taking place outside of their app or the App Store.

Apple will also expand the number of price points available to developers for subscriptions, in-app purchases, and paid apps from fewer than 100 to more than 500. Developers will continue to set their own prices.

Apple will also establish a fund to assist small US developers, particularly as the world continues to suffer from the effects of Covid-19.

Eligible developers must have earned $1 million or less, and they can claim between $250 and $30,000 from a fund into which Apple is paying $100 million.

Ongoing pressure

Apple is facing ongoing pressure over its App Store policies, both in legal cases and regulatory pressure around the world.

It is also involved in a landmark legal battle with Epic Games in a US courtroom over the fees it charges for its App Store.

A judge’s decision in the Epic Games trial is expected later this year.

And the European Commission has charged Apple with violating antitrust rules over its App Store rules for music streaming services, following a complaint by Spotify in 2019.