Apple caves on in-app payments

The Big Story

The App Store fight isn't over yet

Apple announced a slew of changes to the App Store on Thursday that it hopes will help settle a class action suit by developers.

The biggest change: Developers will be able to circumvent Apple's fees. Apple collects a fee of up to 30% on several kinds of in-app transactions, and developers have often complained that they can't steer users to other outside payment methods.

• But with the new changes, Apple would let app developers email users about payment options outside of the iOS ecosystem.
• This would-be shift was proposed after negotiation with developers in the Cameron et al v. Apple suit, which is before federal District Judge Yvonne Gonzalez Rogers. She will now decide whether to approve it.

Apple is responding to lots of legal pressure here. It is also awaiting a verdict from Gonzalez Rogers in a separate lawsuit brought by Epic Games. During the trial in that lawsuit earlier this year, Gonzalez Rogers repeatedly questioned the logic behind stopping apps from communicating with their own customers.

• Apple told reporters on Thursday evening that the statements by Gonzalez Rogers had influenced what it was willing to accept.
• "We would like to thank the developers who worked with us to reach these agreements in support of the goals of the App Store and to the benefit of all of our users," Apple's Phil Schiller, who oversees the App Store, said in a statement.
• Users will have to opt in to receive outside messages from developers, though.

But it's not just lawsuits. Several states have also looked into bills that would regulate app stores over fee concerns.

• Although Apple and Google have largely beaten them back, a bipartisan bill introduced earlier in August in the Senate would completely upend app stores, let apps communicate with users about prices, protect sideloading and allow third-party app stores.
• The EU is cracking down, too.

Apple announced some other plans too as part of its proposed settlement for the class action suit.

• There would be a a $100 million fund for small developers, which would grant them between $250 and $30,000. The fund would be available to those apps that are earning less than $1 million annually.
• It also proposed to increase the number of possible prices for an app, from less than 100 potential price points to more than 500. Apple also said that it had agreed to keep its app search results "based on objective characteristics like downloads, star ratings, text relevance, and user behavior signals" for at least three years, and to try to help apps better understand the appeal process for rejected apps.
• It would also put in place a new transparency report that would include information about "the number of apps rejected for different reasons, the number of customer and developer accounts deactivated," and other data, such as app removals.

The news pleased developers. Donald Cameron, the developer of a baby-naming app who was one of the named plaintiffs in the suit, said the changes would help ensure "that good apps have a better chance of being discovered."

• "This hard-won settlement will bring meaningful improvements to U.S. iOS developers who distribute their digital wares through the App Store," Steve Berman, a lawyer for the developers, said in a statement.

What remains to be seen, though, is whether the changes mollify judges and lawmakers. Or maybe if Tim Cook was just feeling magnanimous after a $750 million payout after his 10th anniversary as CEO.

— Ben Brody (email | twitter)

A MESSAGE FROM TRELLO

After a year and a half of living and working through a pandemic, it's no surprise that employees are sending out stress signals at record rates. Just as with building a healthier lifestyle, enacting measures of support on the day-to-day level is where lasting change is made.

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People Are Talking

Employees aren't going back to the office that quickly, and Marc Benioff isn't mad about it:

• "[Employees] can do their job at home. They can be successful from anywhere."

Sen. Marco Rubio wants the Biden administration to explain why it reportedly gave Huawei approval to buy chips:

• "It is not in America's economic or security interests to help Huawei."

Reddit moderators want the company to better address disinformation. Steve Huffman said "dissent" is part of the platform:

• "Reddit is a place for open and authentic discussion and debate. This includes conversations that question or disagree with popular consensus."

On Protocol | Workplace: It's time for work socials to include people of all ages, former Google employee Karen Wickre says:

• "Are you making a clique, or are you including your teammates?"

Making Moves

Asana and Twilio will be dual-listed on the NYSE and LTSE, becoming the first companies to do so.

Kate Rouch is Coinbase's new CMO. Rouch had been with Facebook for over a decade, and most recently served as global head of brand and product marketing.

Daniel Ninivaggi is Lordstown Motors' new CEO, replacing Steve Burns. Ninivaggi is Icahn Enterprises' former head.

Bruce Andrews is joining Intelas the corporate VP and chief government affairs officer. He comes from SoftBank, where he worked as senior VP and managing partner.

Shahed Khan, who co-founded Loom, joined Hyper as co-founder and general partner.

In Other News

• TSMC will charge more for chips. The world's biggest chipmaker is bumping prices by 10% to 20%.
• The Silenced No More Act is making its way to Gavin Newsom. The California Assembly passed the bill, and if signed into law it won't allow businesses in the state to mandate NDAs that prevent employees from discussing illegal discrimination and harassment at work.
• India is getting serious about digital currencies. The Reserve Bank of India said it could launch a crypto trial by the end of this year, but is still thinking about how the system should work.
• Silicon Valley is trying to help Afghan refugees evacuate. Software engineers and investors are working with a team that includes veterans and former government officials. The voluntary effort, called "Digital Dunkirk," is using maps, online chats and texts to help people flee the country.
• Netflix gaming is here. Well, in Poland. The company launched its gaming service, which currently features two Stranger Things games, through its mobile app on Android.
• China's cyberspying techniques are getting strongerand more aggressive. The country's security agency is recruiting from governments and the private sector, and when the hackers aren't working for China they're acting on their own agendas.
• China's government doesn't like "996" work culture, a 12-hour, six-day schedule that has been popular among Chinese tech companies. Officials called the schedule illegal, but some people won't believe it until they see it enforced.
• Meet Ashley Tyra, one of the employees behind Twitter's Twitter account. The account has taken on a conversational, witty tone in recent years, which a small team incessantly keeps up by bouncing around ideas on a massive Google Doc.

One More Thing

Refreshing your Theranos knowledge

Jury selection begins next week for the trial of Elizabeth Holmes, and now is a perfect time to refresh your memory on everything that happened with Theranos.

• A book: "Bad Blood: Secrets and Lies in a Silicon Valley Startup" was written by John Carreyrou, the Wall Street Journal reporter who broke the original story.
• A documentary: "The Inventor: Out for Blood in Silicon Valley" from HBO unpacks how Holmes' multibillion-dollar health care company fell apart in a matter of a few years.
• A podcast: "The Dropout" is an ABC podcast that includes interviews with former Theranos employees, investors and patients. On Tuesday, ABC will release new episodes that explain what's happening inside the courtroom.
• An article: "Blood, labs and fraud: Theranos's Elizabeth Holmes is about to go on trial" from the Washington Post includes some of the more nitty-gritty details about the upcoming trial, including key players aside from Holmes and the potential punishments Holmes could face.

A MESSAGE FROM TRELLO

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