Apple makes App Store concession on payments

Apple Inc Updates

Apple has partially eased a restriction on its App Store that prevented app developers from offering lower prices to customers through other channels as it faces mounting legal and regulatory pressure over alleged anti-competitive behavior.

While the move was a concession that allowed some digital transactions to bypass the App Store, it didn’t include changes to the iPhone maker’s rules for transactions within applications themselves, limiting its effect.

The rule change was one of several compromises Apple announced Thursday night to partially settle a US developer class action lawsuit over its App Store rules.

Those include a promise to publish an annual report detailing the number of apps rejected from the App Store and the number of customer and developer accounts deactivated.

The US consumer technology giant also said it would change the App Store’s procedures to give developers more pricing flexibility and give them more assurance that users can find their apps.

The announcements came as Apple awaited a ruling in a separate, historic lawsuit from Epic Games on how the App Store works. The case goes to the heart of Apple’s business model for the App Store, challenging the ban on alternative app stores on iPhones, as well as the requirement for in-app payments to flow through its own payment system, allowing fees up to 30 percent on many transactions.

Apple’s business practice aired during the Epic trial included a so-called anti-steering policy that prevented app makers from telling customers they could make purchases outside of the app, thus avoiding paying Apple’s fee. Spotify, Netflix and Match Group are among the companies that have complained about the policy.

By partially easing this rule on Thursday, Apple said it would only allow developers to alert customers through separate communications, such as email, rather than directly through their apps. It added that app makers would only be able to email users who had consented to the communication, as long as they also had a way to unsubscribe.

Along with the Epic lawsuit, Apple faces class action brought to the US on behalf of app developers and customers. The settlement announced Thursday involved only small developers, who make up 99 percent of those covered by that legal action, but are thought to represent only a small fraction of the total App Store costs.

Apple also said it would extend a 50 percent discount on small developer fees for another three years and announced a $100 million fund that will make payments to small developers in the US between $250 and $30,000.

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