Apple Settles Antitrust Suit with App Developer Class for $100M

Apple has agreed to resolve contentions that it illegally monopolizes the market for the distribution of iOS apps and related digital products, according to a motion for preliminary settlement approval filed on Thursday. In addition to monetary payout, the 67,000 class members are set to receive structural relief, including Apple’s promise to tax small developers at a lower, 15% commission rate.

The settlement comes amidst class certification briefing and after two years of litigation in the Northern District of California. This week’s motion contended that the settlement is the result of arm’s length negotiation, that it provides substantial relief to class members, and that its terms are fair, reasonable, and adequate.

The plaintiffs explained that the settlement, if approved, will go to a class of iOS developers earning more than $0 but less than $1 million from transactions annually in the App Store during the relevant six-year period, encompassing more than 99% of all domestic iOS developers. Claimants will reportedly receive between $250 and $30,000 from the fund.

In addition, the settlement will offer several forms of “structural relief.” First, the agreement acknowledges that the lawsuit prompted Apple to launch its Small Business Program this year, under which small developers qualify for the lower commission rate. The parties’ agreement secures the continuation of the program for at least three more years. 

Second, Apple agreed to rewrite its “anti-steering” guidelines to permit direct communication between app developers and their customers regarding alternative payment options. Other structural reforms will reportedly “enable developers to better create, distribute, and monetize their apps.”

The consumer case alleging similar allegations will continue before Judge Yvonne Gonzalez Rogers. In addition, Epic Games and Apple are disputing whether Epic should have access to sealed developer and consumer case filings as they wait for a disposition from the Oakland, California federal court.

Hagens Berman Sobol Shapiro LLP is interim co-lead counsel for the class. Apple is represented by Gibson, Dunn & Crutcher LLP.