Cameron v. Apple Settlement
Apple today announced a number of changes coming to the App Store that, pending court approval, will resolve a class-action suit from US developers. The terms of the agreement will help make the App Store an even better business opportunity for developers, while maintaining the safe and trusted marketplace users love. Apple appreciates the developer feedback and ideas that helped inform the agreement, and respects the ongoing judicial review process.
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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.
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Apple will also expand the number of price points available to developers for subscriptions, in-app purchases, and paid apps from fewer than 100 to more than 500.
First, read this great thread from Ryan Jones.
Apple claims they are ‘clarifying’ this rule. That doesn’t look like a ‘clarification’ to me.
Indeed, the settlement says:
Permit all U.S. Developers to communicate with their customers via email and other communication services outside their app about purchasing methods other than in-app purchase, provided that the customer consents to the communication and has the right to opt out. In-app communications, including via Apple Push Notification service, are outside the scope of this provision. Apple will revise its App Store Guidelines to permit the foregoing for all app categories, including by deleting from Guideline 3.1.3 the following language: “Developers cannot use information obtained within the app to target individual users outside of the app to use purchasing methods other than in-app purchase (such as sending an individual user an email about other purchasing methods after that individual signs up for an account within the app).”
Deleting that sentence is more than a “clarification.” But it’s not much. The customer still has to opt into giving their e-mail address. The app still can’t mention payment methods or even link to its Web site from within the app. And there’s still the guideline that says other payment methods are forbidden except for in apps that “operate across multiple platforms.”
Apple’s draconian anti-steering provisions remain in place just as before.
And Apple deceitfully labelling the restitution they’ve agreed to pay as an “assistance” fund?
Apple also says that it will maintain the Small Business Program for at least three years, publish an annual report on App Review, and allow for more pricing tiers. It sounds like Apple’s concessions are pretty minor, especially since developers are still not allowed to mention alternative purchase avenues within apps.
Hagens Berman, the law firm representing the class of iOS developers affected by this suit, clarifies that even the weak commitments Apple made only apply to U.S. developers. This settlement is a walkover for Apple and a sweet payday for the lawyers involved, but gives developers next to nothing.
It also only affects iOS, not macOS.
Jay Peters, Sean Hollister, and Richard Lawler (via Nilay Patel):
Apple’s press release spins the entire settlement as a generous offer to developers, including the anti-steering change[…]
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A website for eligible developers isn’t fully operational yet (and may not be until the settlement is approved by a judge), 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.
Best way to look at it is they are retroactively applying the small business program, but at a 30->27% rate vs the 30->15% rate today.
So you get a 3% refund on your total revenue as long as you qualified for the program retroactively.
How much must your class action lawyers suck if the only thing you could get out of this was “Apple will let you charge some new prices not ending in .99”
It’s so funny watching Apple PR’s song and dance, embarrassingly patting itself on the back, after yielding basically zero ground on the App Store’s most anticompetitive rules.
You know this changes nothing. We know this changes nothing. Who are you performing for?
This is a massive win for Apple - especially if it sways the judge (the same one as in this class action suit) its way in the Epic trial. They’re basically changing nothing of importance and paying “only” $100 million.
Through the Settlement, Apple acknowledges that this litigation was a factor in Apple’s January 1, 2021 launch of the Small Business Program.
Coalition for App Fairness (tweet):
Apple’s sham settlement offer is nothing more than a desperate attempt to avoid the judgment of courts, regulators, and legislators worldwide. This offer does nothing to address the structural, foundational problems facing all developers, large and small, undermining innovation and competition in the app ecosystem.
Apple’s recent “changes” do not address any of the core concerns Spotify and many others have with Apple. @horaciog explains why.
This new Apple settlement with a group of class-action legal vultures follow the arc of that iconic scene in Fight Club. In which both parties have assumed their ceremonial positions in a pointless settlement that reaffirm existing provisions and then asks for a couple of cornflower blue icons.
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The plaintiffs – here being the actual lawyers in the class-action proceeding, not the interests of the developers they supposedly represent – have justified their pursuit for loot mainly by getting Apple to reaffirm existing policies. Like having them affirm that “at the request of developers, Apple has agreed that its Search results will continue to be based on objective characteristics like downloads, star ratings, …”. So part of this settlement is that Apple says it’ll continue to do search like it’s done so far, and that it won’t make it worse for users and developers by corrupting it with self-dealings and sold preferences, but only for the next three years?
I didn’t previously think the Small Business thing had an expiration date, and now it feels a bit like “nice discounted rate you’ve got there, would be a shame if something happened to it”.
Breaking: Apple has settled the butterfly keyboard lawsuit!
Key Concessions:
- Apple will stop making the 2016-2019 MBPs
- All class members may buy a new Apple laptop
- Apple will recycle old laptops
- All class members will continue to receive 5GB of free iCloud storage
Apple would like to think people are just upset about their tax rate, but it’s not just that — it’s about interfering with perfectly reasonable apps for self-serving reasons and pretending they’re protecting customer interests, and channeling ‘innovation’ down pre-approved paths
So now we have a situation where Apple has given a blessing to collect email in-app. Sure, your app has a good reason doing it, but remember all those other developers that don’t.
We’re likely to see a lot more prompts for email (or Sign In with Apple) just to harvest info.
And customers aren't stupid. They will draw a direct correlation between providing email to apps and an increase in Inbox crap.
Guess who gets hurt?
The folks who have a legitimate reason to contact customers by email.
What’s especially bizarre about Apple’s PR spin is that this settlement is supposed to be about appeasing developers, but we’re the ones who see right through the spin. Which further erodes developer sentiment.
I don’t know what happened yesterday. 🤯 Apple published this press release, and every news outlet I saw ran with a story of “big changes” to App Store rules. What’s strange is that nothing has changed, and the press release says explicitly.
I thought I had experienced the full possible range of feelings regarding Apple and the App Store, but settling a lawsuit, promising absolutely nothing new as part of the settlement, and spinning that as some kind of big developer win, has brought me to exciting new mental places
Apple was gonna smoke them. So:
- Make a list of “changes” that looks big (but don’t actually change anything)
- And pay a “big settlement” (but really as small as possible)
- And let’s GTFO
Basically dev had nada, and Apple let them save face.
Previously:
- Open App Markets Act
- Apple Attacks Sideloading
- Five Antitrust Bills
- App Store Small Business Program With 15% Fee
- Search Ads for Competing Products
Update (2021-09-07): Patrick McKenzie (tweet):
This is likely to be important for app developers. I think people underappreciate the magnitude of the likely impact due to the incrementality of it. It is not what developers have asked for, which is the ability to pitch users within the app itself on consummating payments out-of-band, but it also is not simply a return to the status quo ante to this summer, when Apple announced it would rigorously enforce guidance against steering transactions off-platform.
To appreciate why, remember that a large share (60% or so) of revenue on the App Store is from games, and game developers are in the business of incentivizing users to take small incremental actions within a play session. Sometimes those incremental actions involve e.g. learning the UI of your princess saving application, sometimes they advance the plot, and sometimes they directly achieve business goals for the developer.
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It’s trivial to imagine game companies incentivizing different purchasing choices because this is already a core competence.
The email thing that was the one real “concession” in the Apple is really something else. Basically they just rolled back a change they made a couple months ago, so it’s the same as it had been for years before that 🙃
So many glowing headlines/tweets over basically nothing 🤷🏻♂️
Personally, I don’t actually care about payment methods as a developer. I’m never going to be above the $1m threshold per year, and I think 15% is an acceptable cut.
What happens with App Review and allowing alternative stores is a more interesting question, but even then, taking everything into account, I think I still prefer my garden walled.
The problem is, as a user, you have no idea what you are missing out on having because of the walled garden, and never will while it lasts. I know I dropped my iOS app, and would never develop one that was even vaguely outside the norm because the risk factor is too high.
At this point even I’m less bothered by the 15% than by the fact that I can’t issue refunds, can’t look up previous orders, and have no way (not even via anonymized forwarding as with Sign In With Apple) to contact customers, limitations that apply to no other payment provider.
Update (2021-09-08): M.G. Siegler:
To be clear, it’s obviously the goal of every PR person around every single announcement to accentuate the positive as much as possible. No one can fault Apple for that, of course. But if this bit of reporting by Jack Nicas of The New York Times is to be believed — and I believe it is to be believed given my own experiences in such matters — Apple’s positioning and tactics were decidedly more slippery than just your standard PR spin.
MG Siegler returns to the show to talk about last week’s surprise announcement from Apple settling a class action lawsuit filed on behalf of U.S. App Store developers, and the various reactions to it.
A couple weeks ago, @jeiting and I spoke with @benthompson about all things App Store. One of the many things Ben put so well: regulation is a sledgehammer, not a scalpel. We both shared our concerns that regulation will bring about unintended consequences.
