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Small iOS developers in ‘hard-won’ victory versus Apple

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Small iOS developers have won big in an anticompetitive battle against US-based technology behemoth Apple.

Attorneys at law firm Hagens Berman yesterday announced details of a class-action settlement reached with Apple on behalf of small US iOS app developers.

The settlement will result in the creation of a $100 million Small Developer Assistance Fund and important changes to App Store policies and practices.

The developers’ lawsuit was brought against Apple in 2019 in the US District Court for the Northern District of California by Hagens Berman, Sperling & Slater, Saveri & Saveri, and Freed Kanner law firms.

Rewarding creativity

According to the lawsuit, Apple monopolised US distribution services for iOS apps and in-app digital products, which resulted in commission overcharges to US iOS developers.

The Small Developer Assistance Fund, created as part of the settlement, will benefit over 99% of US iOS developers, whose proceeds from app and in-app digital product sales through all associated accounts were less than $1 million per calendar year during the period from 4 June 2015 to 26 April 2021.

According to the attorneys, these developers can claim sums from the fund ranging between a minimum of $250 to $30 000, based on their historic participation in the App Store ecosystem.

Further, small and other iOS developers will benefit from changes to App Store policies and practices as they relate to App Store search results, app and in-app product price points, appeals from rejections of apps and transparency.

Small iOS developers will also benefit from a pledge that for at least three years following court approval of the settlement, Apple will not raise the 15% commission rate that applies for those participating in its Small Business Programme, say the attorneys.

Additionally, they note, all the iOS developers will benefit from a major change to the App Store Review Guidelines, which will remain in place for at least the same three-year period.

As part of the settlement, Apple will permit all US iOS developers to communicate with their customers outside their apps about purchasing methods other than Apple’s in-app purchase system, subject to consumer consent and opt-out safeguards.

“This hard-won settlement will bring meaningful improvements to US iOS developers who distribute their digital wares through the App Store, especially for those small developers who bring so much creativity and energy to their work,” says Steve Berman, managing partner of Hagens Berman and an attorney representing iOS app developers in the class-action.

“Plus, the creation of the Small Developer Assistance Programme, like the Small Business Programme – both of which our clients’ suit helped to bring about – could not come at a better time, given the pandemic.”

Well-timed win

Donald R Cameron, developer of an iOS baby-naming app and one of the named plaintiffs in the suit, welcomes the Small Developer Assistance Fund, especially given business disruptions caused by COVID-19.

“I’m also very pleased with Apple’s commitments regarding App Store search, so that good apps have a better chance of being discovered. The transparency report that Apple will publish annually is a good thing, too, to allow everyone to review objective data regarding search queries and results.

“More pricing tiers will become available to developers by the end of next year, which is also great.”

Richard Czeslawski, president of Pure Sweat Basketball (PSB), the second of the suit’s named plaintiffs, highlighted three parts of the settlement.

“First, we have guaranteed three more years of the 50% commission drop for developers like PSB. We feel great about the fact that our lawsuit helped bring about such a large price cut.

“Second, we’ve gained the ability to use contact information obtained from signups in our app to communicate with our users outside the app about purchasing alternatives to IAP. That’s a big deal.

“And third, we appreciate all the new pricing tiers that are on the way, which will give us greater flexibility in how we market and sell our workout subscriptions.”

Czeslawski adds he is pleased with the creation of the Small Developer Assistance Fund, which will bring “some welcome financial aid” to small developers in this time of economic insecurity.

Berman sums up: “We truly are proud that a case brought by two developers, standing in the shoes of tens of thousands of US iOS developers, could help to bring about so much important change.”

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