Apple Reaches $100 Million Settlement for Class Action Lawsuit
A proposed agreement between Apple and a class-action lawsuit representing US app developers includes a $100 million payout from Apple. The settlement agreement also has Apple clarifying its policies to explain that iOS developers can contact their customers, with permission, using information collected inside their apps to tell them about payment options outside the App Store.
This change is a shift to the anti-steering policy that has been a big point of contention between Apple and its critics for years. The change, while potentially important for developers, isn’t quite as significant as it may seem. In an update to the App Store Guidelines in June, Apple already changed its rules to allow developers to communicate with customers outside of their apps, but at that time, they weren’t allowed to contact users about alternate payment options using information obtained inside the app.
The proposed $100 million payout would be split by developers who made less than $1 million per year from the App Store. Apple’s press release spins the entire settlement as a generous offer to developers, including the anti-steering change.
The company writes, “To give developers even more flexibility to reach their customers, Apple is also clarifying that developers can 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. Users must consent to the communication and have the right to opt-out.”
The company is also making a number of other concessions as part of the proposed agreement for Cameron et al v. Apple Inc., the big one being a payout of $100 million, which will be split among small developers who earned $1 million or less “for all of their apps in every calendar year in which the developers had an account between June 4, 2015, and April 26, 2021.” Apple has decided to name this the “Small Developer Assistance Fund.”
A website for eligible developers isn’t fully operational yet, but court filings show how the money could be distributed. A proceeds tier ranging from one penny to over $1 million sorts out the potential return, with developers in line for a minimum payment of between $250 and $30,000. That will vary depending on how many people submit approved claims, with leftover funds going to the Girls Who Code nonprofit.
Apple promises to keep the App Store Small Business Program, which allows developers who earn less than $1 million in a year to apply for a reduced 15 percent commission from their sales, in place in its “current structure” for at least the next three years.
The company will publish an annual transparency report about the App Store. Apple says the report will include “meaningful statistics about the app review process, including the number of apps rejected for different reasons, the number of customer and developer accounts deactivated, objective data regarding search queries and results, and the number of apps removed from the App Store.”