Apple Inc. settled a wide-ranging class action lawsuit with U.S. app makers Thursday without agreeing to major changes to its policies, a victory for a company facing criticism that it wields too much power.
The settlement will include $100 million worth of payments to app makers ranging from $250 to $30,000 per developer, according to law firm Hagens Berman, which represented plaintiffs claiming Apple overcharged them fees for distributing their programs through the iOS App Store. A new advertising policy, meanwhile, will make it easier for developers to promote alternative pricing plans and ways to pay — without Apple taking a cut.
Apple has long allowed developers to advertise external payment methods — such as Netflix Inc. pointing users via email to sign up on its website instead of the app — but has frowned upon the practice. The new policy ensures Apple won’t ban developers for these communications. It doesn’t, however, let developers advertise outside pricing or payment methods within the apps themselves. The settlement also addresses only U.S. app developers, leaving Apple’s global position unchanged.
The company is “clarifying that developers can use communications, such as email, to share information about payment methods outside of their iOS app,” Apple announced in a statement.
Critically for Apple, the settlement excludes more significant App Store changes that were sought by some outside developers and legislators. The company is still requiring developers to sell their apps — as well as in-app items and subscriptions — using Apple’s payment system, which takes between 15% and 30% in commissions. Apple reduced the cut to 15% for developers that generate $1 million or less annually last year. On Thursday, it committed to continuing that policy for the next three years.