Apple Makes Key Changes After Serious Allegations

( Last Thursday, Apple, Inc. settled a wide-ranging class action lawsuit brought by US app developers without agreeing to major changes in its policies. This settlement is seen as a victory Apple, which has been facing widespread criticism that it wields too much power.

According to the law firm Hagens Berman, which represented plaintiffs in the suit, the settlement will include $100 million in payments to app developers ranging between $250 to $30,000 per developer. Plaintiffs had claimed Apple overcharged them fees for distributing their programs through the iOS App Store.

Meanwhile, a new advertising policy will make it easier for developers to promote alternative pricing plans and ways to pay – without Apple taking a cut.

Apple has long permitted app developers to advertise external payment methods, but has always frowned on the practice. The new policy ensures Apple will not ban developers for these communications. However it does not let developers advertise outside pricing or payment methods within the apps themselves.

The settlement is limited to US-based app developers only while Apple’s global position will remain unaffected.

Critically for Apple, this settlement excludes the more significant changes to the App Store sought by both developers and legislators. The company still requires developers to sell their apps – as well as in-app items and subscriptions – through Apple’s payment system. This means Apple will still take between 15 and 30 percent in commissions. Last year Apple reduced the commission to 15 percent for developers that generate a million dollars or less annually. In Thursday’s settlement agreement, it committed to continuing that policy for the next three years.

The settlement also doesn’t require Apple to allow for third-party app stores or “sideloading” of software. What’s more the company does not have to further reduce its revenue share.

The settlement is still pending approval from Judge Yvonne Gonzalez Rogers who is overseeing the lawsuit.

Advocates for app developers are not too happy with the settlement. Meghan DiMuzio, executive director of the Washington-based Coalition for App Fairness complained that this settlement does nothing about Apple’s “total control over the app marketplace.” Central to her objections was the settlement did not address the “structural, foundational problems” facing app developers which she said undermine innovation and competition.