By Rachel Lerman, Cat Zakrzewski, Heather Kelly
Apple announced it would make major changes to its App Store as part of a proposed lawsuit settlement with developers, following years of mounting regulator scrutiny and legal challenges.
The company will let developers tell its iPhone and iPad customers about ways to pay for apps outside the official App Store, it said in a news release late Thursday. The settlement still needs to be approved by the court.
The change is in response to a suit brought by small app developers. Apple is also expecting an imminent judgment in a suit by Epic Games over similar allegations in front of the same judge.
The move would be the biggest change Apple has made in response to accusations that it has monopoly powers. Companies including Fortnite-maker Epic have alleged Apple wields too much control over how people can purchase apps for iOS devices, forcing them to go through the official App Store which charges a 30 percent commission.
The settlement is the iPhone giant's greatest allowance to aggrieved developers following years of regulatory scrutiny of its App Store rules. Earlier this summer, a bipartisan pair of senators introduced legislation that would have prohibited companies from requiring developers to use their payment system.
The company's App Store rules are also being scrutinized by the U.S. Justice Department.
Apple's previous attempts to extend the olive branch to developers have failed to assuage a growing firestorm of criticism. The company last year cut the commission it collected from developers with less than $1 million in annual revenue.
The company has been defending its App Store from regulation around the world. European regulators earlier this year accused the tech giant of breaking antitrust laws by imposing unfair rules on music streaming competitors, following a complaint from Spotify.
Apple CEO Tim Cook has long claimed the tightly controlled store is necessary to weed out malware, scams and other unsavory apps. However a June analysis by The Washington Post found that of the 1,000 highest-grossing apps on the App Store, nearly 2 percent were scams.
In addition to the ability to pay for apps outside the Apple ecosystem, the changes will include the ability to charge a larger range of prices for apps, and in-app purchases including subscriptions. It said it would also develop a fund to help small developers.
The proposed App Store changes, announced in a news release, are still pending court approval and Apple did not give a date on when they would be released.
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The Washington Post