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Apple agreed on Thursday to relax App Store restrictions on small developers and reached an agreement in a class action lawsuit as the iPhone maker is waiting for the same judge to rule in another App Store dispute brought by the developer behind Fortnite .

The transaction includes changes to the way all developers communicate with customers, which was an issue the judge himself highlighted in the Fortnite case.

But Apple retains the majority of App Store commercial practices that have been challenged in courts and legislatures. On the contrary, it only gave up 100 million U.S. dollars (about 7.4 billion rupees), which is a small sum for a company worth more than 2.4 trillion U.S. dollars (about 178,0021 billion rupees). The stated set of email marketing restrictions may be difficult to defend in a case before the U.S. Supreme Court, which allowed the company to prohibit its business partners from directing customers to other payment methods.

A group of smaller software developers filed a lawsuit in 2019, accusing Apple of violating antitrust laws and charging commissions of up to 30%. The Cupertino, California-based company said it has reached a proposed settlement agreement that covers U.S. developers with annual revenues of US$1 million (approximately Rs 74 crore), in this case , The developer released all statements about Apple’s excessive commissions.

Apple is waiting for the verdict of the high-profile antitrust case brought by Fortnite creator Epic Games. The settlement proposed on Thursday requires the approval of U.S. District Court Judge Yvonne Gonzalez Rogers for the Northern District of California, who is expected to rule on the Epic case.

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As part of the Thursday transaction, Apple said it will make changes to the App Store, including extending the changes made last year for three years and reducing commissions for small developers to 15%.

For a long time, developers have been able to take other forms of payment outside of their apps to avoid charging Apple for commissions, while some developers such as Netflix have avoided Apple’s in-app payment system.

But Apple has strict rules for developers using contact information collected from customers who have registered through the App Store and then telling these customers about other payment methods. These payment methods are usually cheaper because they do not need to charge Apple.

Small developers without Netflix’s reputation have long opposed Apple’s restrictions to prevent them from establishing direct billing relationships with customers.

During the Epic-Apple trial in May, Gonzalez Rogers criticized Apple’s rules, although Epic did not make them the core of the case.

“Apple seems to be anti-competitive by hiding this information in a way that is not directly reflected to consumers,” she said.

Apple said these changes will apply to all developers worldwide, not just small American developers directly covered by the settlement agreement. The company will also set up a US$100 million (approximately 7.4 billion rupees) aid fund for small developers.

Steve Berman, the managing partner of Hagens Berman, who represented the developer in the case, said the settlement would bring “meaningful improvements.”

© Reuters 2021

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