BERKELEY, Calif. — Apple has agreed to let developers of iPhone apps email their users about cheaper ways to pay for digital subscriptions and media by circumventing a commission system that generates billions of dollars annually for the iPhone maker.
If a judge approves, Apple’s concession would cover emailed notifications but would not allow in-app notifications
It’s part of a preliminary settlement of a lawsuit filed nearly two years ago on behalf of iPhone app developers in the United States.
It also addresses an issue raised by a federal judge in Oakland, Calif., who’s expected to rule in early October on the proposed settlement and on a separate case filed by Epic Games, which makes the popular video game Fortnite.
Apple announced the news in a “background” briefing with reporters in which it insisted on anonymity for participating executives and would not allow any direct quotations.
Under longstanding Apple rules, makers of iPhone apps were forbidden to send emails to users with information on how to pay for services outside the app — which would circumvent Apple commissions of 15% to 30%.
The concession the company is proposing would now open one way for app developers to more aggressively encourage its users to pay in other ways, as long as the companies obtain consumers’ consent.
Apple also would set up a $100 million fund to pay thousands of app developers covered in the lawsuit amounts ranging from $250 to $30,000.
App developers would also get more flexibility to set different prices within their apps, expanding the options from about 100 choices to 500.
The compromise addresses a concern that U.S. District Judge Yvonne Gonzalez Rogers repeatedly raised while presiding over the high-profile Epic-Apple trial. She openly wondered why Apple couldn’t allow developers to display a range of payment options within their apps, much like brick-and-mortar retailers can show a range of credit cards they accept in addition to cash.
Apple still isn’t allowing developers to use in-app notifications to prod consumers to explore different payment options.
But just being able to email users to explain why they should pay outside the app would be a breakthrough for developers, who have complained for years that Apple’s commissions amount to price gouging.
Richard Czeslawski, CEO of Pure Sweat Basketball, one of the app developers that filed the lawsuit Apple is proposing to settle, called the freedom to email users a “game changer” in a declaration field with the judge.