Court cases often turn into tedious cases, the outcome of which is irrelevant. Every now and then, however, details and arguments emerge that serve to illustrate them at a glance. Something like this happened involving Apple and some US developers, who reached an out-of-court settlement last week that was made public.
In the documentation raised by both parties we find some figures that reveal the enormous abyss that exists in the App Store. The one that separates the small developers on one side and the big ones on the other.
67,000 small developers against 586 large developers
From the documentation provided by the plaintiff (Cameron and company) we find the definition of the companies that would enter the class action. This definition is necessary to define who enters and who does not enter into the agreement signed by the parties. According to the document :
The settlement, if approved, would resolve claims of approximately 67,000 iOS developers making more than $ 0 but less than $ 1 million in annual App Store transactions during the claimed period.
Elsewhere in the document, it is specified that:
The 586 major developers who withdrew from the class action lawsuit are, by definition, the most capable of bringing their own cases against Apple. In fact, one of them (Epic) has done it before.
So we have how many developers are making less than a million dollars and how many are making more than that amount in the United States (as long as they are charging above zero dollars). If we do a quick math, we will see that small developers make up 99.13% of the total, while large developers make up “only” 0.87%.
The interests of small developers are diametrically opposed to those of large development “houses”
This is where the new SME program launched by Apple last year comes in. In it, Apple reduced the App Store commission to 15% for developers who charged less than $ 1 million per year. At first, the $ 1 million figure seemed a bit hit and miss, but with this new information it makes perfect sense.
Big developers, against the deal
The two sides have had four talks to reach an agreement, including two after the close of the lawsuit between Epic and Apple (pending judgment). The judge responsible for the case is Yvonne Gonzalez Rogers, the same in the case between Epic and Apple. Interestingly (or not), the judge proposed a similar resolution to this case as the one finally accepted by Apple and developers in the United States. In fact, this is one of the likely outcomes of the Epic v App Store case.
The great novelty of this agreement between Cameron and Apple concerns the anti-management measures. Anti-bend refers to the prohibition on telling a customer where they can buy a cheaper product while inside a store. In other words, a clothing brand cannot advertise web promotions in their store within a department store.
“Anti-directional” prevents a salesperson from informing the customer of other ways to get the cheapest product while inside a third-party store
For small developers, this is a way to circle the App Store’s 15% commission and earn an extra pinch with their apps. But for big developers, this is not enough. According to the head of the Coalition for App Fairness, Meghan DiMuzio, the deal is a “sham”:
The deal with Apple is a sham, a desperate attempt to avoid trial by courts, regulators and lawmakers around the world. This offering does nothing to address the structural and fundamental issues facing developers large and small.
The letter continues to show some frustration with Apple’s deal in the United States. Just look at how they interpret alternative payments legislation in the newly introduced South Korean App Store, which they call “historic.” For this coalition of great developers, eliminating anti-leadership rules is insufficient.
Loot the App Store as the ultimate goal
As the top chart posted by Spotify on its Twitter account shows, what big developers like Spotify and Epic are looking for is not discussing the commission percentage. Nor whether or not they can communicate with the user to inform them of other ways to pay for their app or service. It’s much more than that, because according to the table they are looking for:
Ban the mandatory in-app payment system. Prohibit communication restrictions with the user. Avoid using data generated by the App Store on app activity to compete with them. Prevent Apple from placing its apps and services in preferred locations. Force Apple to provide access to all the developer tools it uses in its own applications and software.
In short, a letter to the Magi which seeks to plunder the App Store and twist the arm of Apple to put its devices at the service of Spotify, Epic and company. This is not a fight for a higher or lower commission percentage in the App Store. Apple could announce tomorrow that this percentage becomes zero, that these great developers would continue to fight with the App Store.
The app store’s anti-leadership rules are under siege around the world and Apple needed to remove them. This is one of the claims that makes the most sense, especially for small developers. By eliminating them, Apple makes it difficult to argue the big development “houses” by showing that they are defending their own interests rather than the entire developer community. In a battle where PR plays a big role, this can be the key.