App: Businesses Can Dodge Apple’s Commission

Faced with the anger of application developers, Apple has chosen to compromise. In 2019, a group of several developers filed a complaint against the Californian giant. App developers accused the giant of having “cornered the iOS app market with its App Store and knowingly used its monopoly to establish profit-destroying commissions and fees.”

On August 27, Apple announced that it had reached an agreement with the plaintiffs in order to avoid a long and risky procedure.

To put out this fire, Apple made a key concession: the group accepts that developers inform their customers, outside of apps, of the existence of alternative payment methodss. They will be able to encourage the public, via an e-mail for example, to take out a subscription directly on their site rather than in their app. The maneuver, so far vigorously disapproved by Apple, allows to bypass the commission of 15 to 30% levied by the Californian giant on transactions made inside the App Store.

A fund of $ 100 million

“This hard-won agreement will allow decisive improvements for developers on iOS, who market their digital goods on the App Store,” said one of the plaintiffs’ lawyers, Steve Berman.

Apple also announced that the reduced commission rate of 15% for small developers – with less than $ 1 million in annual revenue – would be maintained for at least three years. And the group will create a fund, endowed with 100 million dollars, to support small American developers. Recipients will be able to receive between $ 250 and $ 300,000 each, according to the plaintiffs’ lawyer.

The price paid remains low. Not only with regard to Apple’s financial strength, but above all to the extent that, if the agreement is validated by justice, most of the rules of the App Store will remain in force. Other app stores will still be banned on iPhones. Apple’s payment solution will remain the only one authorized within the App Store. Commission rates will be unchanged. And developers will remain prohibited from informing users, within their apps, of the existence of alternative means of payment – via a simple link to their site, for example.

Epic Games trial

Will this concession be sufficient? According to the specialized media Protocol, it is Judge Yvonne Gonzalez Rogers who will have to decide. The same one that must decide the outcome of the Epic Games trial, the results of which were to be published in the coming days. The video game creator had knowingly violated the rules of the AppStore to protest against this same commission of 30%, considered excessive.

During a hearing with the CEO of the Californian company, last May, Yvonne Gonzalez Rogers asked him why Apple did not allow developers to notify their customers that it was possible to make purchases online, without pay the 30% commission. At that time, Tim Cook had refused outright, stating that this would mean that Apple ” [renoncerait] indeed to any return on our intellectual property ”.

Faced with the threat of a “class action” from the developers, the group puts a little water in its wine. It must be said that another collective procedure hangs in his face: that, authorized by the Supreme Court of the United States in 2019, and which brings together American consumers who consider themselves aggrieved … by the commissions charged by Apple in its App Store.