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Developers and regulators say changes to the Apple App Store are not enough

Developers and regulators say changes to the Apple App Store are not enough

Apple has announced a number of minor changes to the process of collective action by developers, but they do not seem to go far enough.

Developers are debating Apple’s clarification statement about the App Store in resolving a class action lawsuit filed against it by developers in 2019. Some say the ads don’t go far enough, but others appreciate the approach. payment. .

10 years later, you can send customers by e-mail

Since introducing the App Store more than a decade ago, Apple has always insisted that payments be made primarily in its ecosystem.

Of course, developers have always been able to offer registration accounts outside the App Store. But they were not allowed to send emails to iOS users to let them know that there are other payment methods. This could include an email sent to a customer at the end of the trial period, inviting them to sign up for a service, which you can do now.

This probably means that developers can request a person’s email and ask permission to receive offers. If I get approved, I can send offers via email, but I still can’t from your app.

Even with these changes, Apple continues to prohibit developers from mentioning alternative payment options on their app description pages. According to the legal agreement: «By informing customers about alternative payment options, developers can avoid paying Apple taxes and can also put competitive pressure on Apple to control their prices.»

Apple has also expanded the number of price points it accepts in the store.

This may help some developers build more resilient businesses, but it will also mean that consumers need to look twice at prices before buying. There will be more than 500 price points.

American developers will receive between 250 and 30,000 dollars

Apple has announced a $ 100 million fund to «assist qualified American developers.» This means that smaller developers offering sales or subscription applications will be able to claim $ 250, up to $ 30,000 for those earning more than $ 1 million each year.

The legal agreement shows that 85% of Apple developers in the US earn $ 5,000 or less a year through the store. It also reveals that lawyers will receive fees of up to $ 30 million from this fund.

Small Business Program

The settlement document confirms that Apple has announced its small business program in direct response to the class action lawsuit. Under this system, companies that earn less than $ 1 million a year pay a 15% sales commission, subsidized by larger developers who pay the 30% rate.

Apple says it will keep the program for at least another three years. This is alarming for some developers, who also point out that the scheme could be further improved and worry that it will become finished.

Given that 85% of Apple developers in the US earn less than $ 5,000 a year, it may come as no surprise that, in its current incarnation, Apple’s small business program only reduces App Store revenue by 59 millions of dollars every year.

This means that most of the billions the company generates each year come from larger developers.

Follow the route … search

In another interesting section of the agreement, Apple agrees that search results will continue to be based on tangible data, such as star ratings or relevance for at least the next three years. This suggests that Apple may expand its advertising activity more deeply in the search in the App Store, which implies in itself that the company could have a broader plan in terms of search. (Recent news that Google can pay up to $ 15 billion to remain the default search engine on iOS means that any such plan could affect Apple’s revenue.)

(Something) more transparency

One last thing that might be of interest in this matter is Apple’s commitment to publish an annual transparency report in which it will provide the number of applications it has rejected, customer and developer accounts canceled for incomplete or fraudulent behavior, and information about search queries and results. It will also reveal the number of apps that are removed from the store each year.

We already have a rough idea of ​​how this report will work after the publication of similar company data in 2021.

Among other data points, the report claimed that 95,000 applications and 244 million customer accounts disabled for fraud were removed.

Critical voices remain strong

Announcing the news, Apple member Phil Schiller said: «We would like to thank the developers who worked with us to reach these agreements in support of the App Store’s goals and for the benefit of all our users.»

Epic’s Tim Sweeney doesn’t look impressed. Promising to continue his company’s struggle to force alternative payment methods on the App Store, he posted on Twitter:

«Is it a complete coincidence that Apple abandoned its customer privacy commitments in the same month that it is asking the US government to formally support and adopt the Apple app store and the payment monopoly in trade negotiations? Outside?»

He was referring, of course, to Apple’s really disturbing CSAM plans.

Analyst Benedict Evans notes that the Apple App Store commission, combined with the estimated money it receives from Google for iOS searches, rises to over all Netflix revenues. It is also more than Adobe and McDonalds.

Evans seems to believe that it is inevitable that regulators will ultimately make decisions about all of this. I tend to agree.

Senator Amy Klobuchar (D-Minn.), Chair of the Senate Judiciary Antitrust Subcommittee, backed Apple’s move, but said more: «This new Apple action is a good first step in addressing some of these competition issues. But more needs to be done to ensure an open and competitive mobile app market, including common sense legislation to set the rules of the road for regular app stores. «

It is important to note that the settlement has not yet been approved by Judge Yvonne González Rogers, who oversees both this case and the one pending before Epic. (You can read the legal report here).

Regulators are currently investigating the Apple App Store business model in several countries.

The reaction to Apple’s move told me that the company had not yet gone far enough to silence critics. Therefore, I believe that the end result will lead regulators to place a number of limitations on this part of the company’s business, but this will take many more years.