Apple said it plans to make major changes to its App Store policies as part of a settlement with developers. The concession follows years of litigation and regulatory scrutiny over the company's business practices, which have been labeled as anti-competitive and unfair.
The company said late Thursday that it will allow developers to inform customers of other ways to conduct in-app purchases outside of its official App Store. Apple said it will also ease its rules governing pricing for subscriptions, app purchases, and in-app purchases.
In the past, developers were prohibited from selling in-app purchases outside of Apple's App Store. This effectively forced them to only use the company's payment system, which charges a high 30% commission on all purchases.
Several app developers, including Fortnite developer Epic Games, have filed lawsuits against Apple for its monopolistic policies. Epic Games' lawsuit against Apple is expecting an imminent judgment by a federal court in California.
Apple's announcement is by far its biggest concession in response to legal action over its monopolistic business practices. Developers and regulators have repeatedly accused Apple of holding too much control over the app store market.
Earlier this year, a pair of senators proposed legislation that would ban companies such as Google and Apple from forcing developers to only use their respective payment systems. The proponents of the proposed legislation argued that the companies' monopoly over apps and app stores must be reined in as it undermines fair competition, which will, in the end, impact consumers.
Senator Richard Blumenthal, one of the proponents of the proposal, said the settlement is a "significant step forward" in addressing competition concerns. He added that more has to be done to ensure an open mobile app marketplace.
While the concession may be significant, it still does not address other concerns raised by developers. Apple still does not allow developers to make their apps available on third-party platforms. This means that iOS and iPhone users still have to use the company's App Store if they want to purchase or download an app.
Developers such as Epic and Spotify argued that Apple's proposal is simply insufficient. The Coalition for App Fairness said the settlement is a "sham" and is only Apple's way of avoiding legal judgment.
This offer does nothing to address the structural, foundational problems facing all developers, large and small, undermining innovation and competition in the app ecosystem," the coalition said.
