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Apple to allow developers to accept payments outside the App Store

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Apple has announced it will allow app developers to accept payments outside the App Store as part of a settlement following a lengthy US court case.

Developers will now be able communicate with their customers outside the App Store via email and share information about other payment methods outside of their iOS app.

Any payments made through the app were subject to up to 30 per cent commission but Apple says developers will not have to pay a commission for payments received outside the App Store.

This move is in response to several US developers who joined forces to take on Apple in a class action after accusing the company of having monopoly powers over how app users can purchase apps and freely make in-app purchases.

Apple says this move will help make the App Store an even better place for developers to run their businesses.

Apple CEO Tim Cook

“From the beginning, the App Store has been an economic miracle; it is the safest and most trusted place for users to get apps, and an incredible business opportunity for developers to innovate, thrive and grow,” said Phil Schiller, Apple Fellow who oversees the App Store.

“We would like to thank the developers who worked with us to reach these agreements in support of the goals of the App Store and to the benefit of all of our users.”

Apple is also still awaiting a decision after its court battle against Epic Games – creators of Fortnite.

Epic alleged that the App Store is a monopoly and that the company is charging too much commission for in-app purchases.

Epic approached Apple in June 2020 to negotiate a special deal that would allow them to accept payments for in-app purchases from customers directly. Apple refused.

But this latest Apple settlement is basically offering other US developers to get what Epic Games was asking for – payment from customers outside the walls of the App Store.

A decision is expected in the Epic v Apple case any day now.

Apple has also set up a new fund – said to be valued at $US100 million – to assist small US developers as the world continued to battle the COVID pandemic.

Here are the key priorities which has been submitted by Apple and US developers to the courts for approval:

– In a validation of the App Store Small Business Program’s success, Apple and the developers agreed to maintain the program in its current structure for at least the next three years. Businesses earning less than US$1 million annually will continue to benefit from the reduced commission, while larger developers pay the App Store’s standard commission on app purchases and in-app payments.

– App Store Search has always been about making it easy for users to find the apps they’re looking for. At the request of developers, Apple has agreed that its Search results will continue to be based on objective characteristics like downloads, star ratings, text relevance and user behaviour signals. The agreement will keep the current App Store Search system in place for at least the next three years.

– 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. As always, developers will not pay Apple a commission on any purchases taking place outside of their app or the App Store. Users must consent to the communication and have the right to opt out.

– 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. Developers will continue to set their own prices.

– Apple will maintain the option for developers to appeal the rejection of an app based on perceived unfair treatment, a process that continues to prove successful. Apple has agreed to add content to the App Review website to help developers understand how the appeals process works.

– Over the last several years, Apple has provided a great deal of new information about the App Store on apple.com. Apple agreed to create an annual transparency report based on that data, which will share meaningful statistics about the app review process, including the number of apps rejected for different reasons, the number of customer and developer accounts deactivated, objective data regarding search queries and results, and the number of apps removed from the App Store.

– Apple will also establish a fund to assist small US developers, particularly as the world continues to suffer from the effects of COVID-19. Eligible developers must have earned US$1 million or less through the US storefront for all of their apps in every calendar year in which the developers had an account between 4 June 2015 and 26 April 2021 – encompassing 99 per cent of developers in the US. Details will be available at a later date.