Apple Opens Payment Gateways For Devs As Part Of $100M Class Action Suit

Apple, Settles, Class Action, Payment Gateways, App store, developers

Apple settled a 2019 class action lawsuit brought by app developers and will now allow developers to directly connect with users and extend alternate payment options, the company said in a blog post.

The move gives developers the power to email their users and offers alternative ways to pay for subscriptions and other in-app purchases, sidestepping Apple’s commission, which ranged from 15-30 percent. The concession allows email notifications from developers to users but not in-app alerts.

See also: US Senate Bill Focuses On App Store Payment System Rules

Some aspects of the settlement align with allegations by Fortnite game maker Epic, a case still pending a final decision in federal court. That lawsuit stemmed from Epic’s move to avoid Apple’s in-app payment system and give its gamers another way to pay. In turn, Apple banned Epic from the App Store for violating its terms.

See also: Musk Calls Apple’s App Store Fees A ‘Tax,’ Backs Epic Games

As part of the settlement, Apple is establishing a $100 million fund — the Small Developer Assistance Fund — for app developers that made less than $1 million from app store sales from June 2015 to April 2021. Apple said in the blog post it will apply to 99 percent of developers, and further details are forthcoming.

It’s estimated that developers will be entitled to amounts ranging from $250 to $30,000 from Apple’s new fund, “based on their historic participation in the App Store ecosystem,” according to a press release from the law firm Hagens Berman, part of the team of attorneys that filed the class action suit on behalf of the developers. Sperling & Slater, Saveri & Saveri, and Freed Kanner law firms were also part of the 2019 suit.

See also: Apple Hit With EU Antitrust Violations Over Spotify’s App Store Complaint

Judge Yvonne Gonzalez Rogers of U.S. District Court for the Northern District of California still has to approve the settlement. She is the same judge presiding over Epic Games suit against Apple.

App developer and one of the lawsuit plaintiffs Richard Czeslawski called the settlement a “big deal,” according to the press release. 

“We’ve gained the ability to use contact information obtained from signups in our app to communicate with our users outside the app about purchasing alternatives to IAP. That’s a big deal.”