Apple lifts the gag order

Now that wasn’t so hard, was it?

From Eric Savitz’ “Apple’s Changing Its App Store Rules in a Tentative Lawsuit Settlement.” posted Thursday on Barrons.com:

Apple  has reached a tentative settlement of a class-action lawsuit that will allow developers new flexibility on how they work with the company’s App Store.

Among other things, Apple agreed that developers have the right to tell customers how they can pay for apps outside the App Store, enabling developers to avoid paying Apple commissions in some circumstances. Developers will not pay Apple a commission on any purchases taking place outside of their app or the App Store.

The agreement comes amid growing scrutiny of Apple’s substantial commission revenue from the App Store, and the company’s strict rules on how developers can generate revenue from their applications. Apple awaits a decision on a lawsuit over similar issues that was filed by Fortnite developer Epic Games.

Apple said the agreement, announced late Thursday, “clarifies” that developers can notify users of purchase options outside of their iOS apps and the App Store. Apple is also expanding the price points developers can offer for subscriptions, in-app purchases, and paid apps. And the agreement establishes a new fund to assist smaller U.S. developers.

My take: Apple drives a hard bargain. It has to get dragged into court — kicking and screaming — to do the right thing. As Ben Thompson wrote last May…

The fact that apps [couldn’t] even tell you that they have a website is what prompted Senator Blumenthal’s observation that Apple and Google were in Congress to “defend the patently indefensible.”

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13 Comments

  1. Jeff Galanti said:
    This seems like very good timing for Apple to achieve peace in the valley. Obviously, there will still be some grumbling but this is a pretty good pressure release valve right before the biggest Fall lineup in the company’s history. I have no doubt that they are still going to control the experience and loss of revenue from people going around Apple will be incremental. I think this lost revenue will be more than made up for by new search and ad dollars now that the anti-tracking features are becoming so well-embedded.

    2
    August 27, 2021
  2. Jerry Doyle said:
    “…. Developers will not pay Apple a commission on any purchases taking place outside of their app or the App Store.”

    The offer above may be an incentive for a few app users to obtain more competitive pricing by consummating their app purchases outside the Apple App Store, but I suspect for added safety that most iPhone users will desire consummating purchases inside the App Store for added protection against fraud and abuse.

    “…. The fact that apps [couldn’t] even tell you that they have a website is what prompted Senator Blumenthal’s observation that Apple and Google were in Congress to ‘defend the patently indefensible.’”

    I disagree with the good senator in that developers seemingly want a free ride on Apple’s lucrative iOS platform to access Apple’s iOS users IB. It’s like wholesale vendors placing their merchandise in key retailers’ brick & mortar outlets (such as Kroger’s, Walmart and others) to access these popular retail outlets targeted clientele without wholesale vendors having to pay rent, upkeep & security of shelved merchandise space that generated wholesale vendors’ profits.

    This is a very good negotiated agreement for Apple and Developers. Developers probably will be surprised by the lack of consumer response to go outside the wall-garden to consummate purchases. I believe Apple users will stay inside Apple’s wall-garden to avoid potential fraud & abuse. I also believe Apple users will stay inside the wall-garden for the simplicity and streamlining of payment it affords Apple users as oppose to the convoluted process of a circuitous route to consummate payment.

    7
    August 27, 2021
    • Gregg Thurman said:
      such as Kroger’s, Walmart and others) to access these popular retail outlets targeted clientele without wholesale vendors having to pay rent, upkeep & security of shelved merchandise space that generated wholesale vendors’ profits.

      Not a good analogy. In the food industry the major manufacturers pay for the shelf space, then keep everything their product sells for. The point of the practice is to deny shelf space to smaller manufacturers.

      That’s why you don’t see much from local producers in the larger grocery store shelves.

      Why the practice is allowed to continue is beyond me.

      1
      August 27, 2021
      • Jerry Doyle said:
        @Gregg Thurman: “…. The point of the practice is to deny shelf space to smaller manufacturers.”

        I believe you just gave credence to Senator Blumenthal’s argument on Google’s payment to Apple to be the default search engine.

        0
        August 27, 2021
        • Gregg Thurman said:
          I did, but Congress and the regulators really don’t care about anti-trust until the violators become visible, not for their violations per se, but because of their political value (gotta show them voters you’re looking out for them).

          Who cares if Coca Cola and Pepsi controls 96% of the soft drink shelf space?

          0
          August 27, 2021
  3. Fred Stein said:
    Minimal impact on Apple’s bottom line.

    Minimal impact on the safety provided by Apple’s wall garden safety measures.

    Near zero financial impact on consumers and App or services providers on iOS.

    Big impact in reducing the regulatory threat.

    Can’t wait to hear from Judge Yvonne.

    9
    August 27, 2021
  4. David Emery said:
    It will be interesting to see if this means I can more easily buy ebooks from Amazon.

    One thing that generally bothers me about ebooks are the really nasty restrictions on lending/sharing. Apple restricts to your ‘family’. Many titles on Amazon prohibit any sharing whatsoever.

    If the Congresscritters want to do something for consumers, that’s something they should take on. I should have the same rights for an ebook I have for a paper book. That’s a dig on both the ebook platforms and particularly their agreements with publishers.

    4
    August 27, 2021
    • Gregg Thurman said:
      Our legal system and the practices therein are rife with illogical inconsistencies. At the very least an eBook buyer should allowed to give it to one other party. That would be the same capability an owner of physical books have, and Amazon exercises with its USED BOOK sales segment.

      3
      August 27, 2021
  5. I couldn’t begin to assess the impact on already burgeoning App Store revenue. In-App purchases while in the middle of an intense interactive gaming session are quick impulse buys. You hesitate, you get clobbered.
    I know there are all sorts of games and apps but I look over my nephew’s shoulders and they’re rarely skiing or car racing, more typically shooting at something. Fingers flying. Until they stumble on special items. Here they may decide to make a purchase, but someone is shooting at them or about to.
    If all players decide to refill their wallet over on the website then spend the money in-game, Apple’s App Store income growth might be slowed. Fat chance. Old habits are nearly impossible to break.
    Initial app purchase, if required, remains App Store income. Side-loading around iPhone security measures will be fought to SCOTUS.
    Next security breach of Epic or another gaming firm will send everyone back to Apple Pay or other internal payment method.
    A significant % of active gamers still live at home with the ‘rents. Do parents provide the App Store cash and how? Apple accounts predominate, I’m sure.
    Watch some analyst put a dollar figure on this new App Store paradigm.

    1
    August 27, 2021
  6. Steven Philips said:
    Maybe Apple should just change the store model. No mention of ANY app unless the creator buys an advertisement. The cost of the ad would vary depending on “hits”, the size of the ad and how often and where it’s placed. Even the NYT couldn’t object to this model!

    1
    August 27, 2021
  7. Darren DMW said:
    The family sharing / parental payment approval system should not be underestimated. As a parent my young gaming children often send me “requests” for app purchases. Only some are approved. It’s a brilliant system that works for all. Going to be very difficult, near impossible, for any other payment platform to emulate at scale.

    1
    August 28, 2021

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