Blumenthal Not Fully Satisfied with Apple iOS App Lawsuit Settlement

Senate Consumer Protection Subcommittee Chairman Richard Blumenthal, D-Conn., considers Apple’s proposed $100 million settlement to end a class-action lawsuit in the U.S. District Court in Oakland involving small U.S. iOS app developers a “significant step forward, but does not rectify the full and vivid range of market abuses and practices still widespread across app markets.” The plaintiffs claimed Apple monopolized U.S. distribution services for iOS apps and in-app purchases that resulted in commission overcharges to app developers. The proposed settlement in case 4:19-cv-03074-YGR would use the $100 million to set up a Small Developer Assistance Fund, for developers whose annual proceeds totaled less than $1 million between June 4, 2015, and April 26, 2021, Hagens Berman, one of the firms representing plaintiffs, said. Developers can claim up to $30,000 from the fund. Apple also agreed to change its app store rules to allow developers to communicate with customers outside their apps about purchasing and pricing alternatives to Apple’s in-app purchase system, Hagens Berman said. A website to administer the $100 million won’t go live until the Oakland court approves the settlement. “Today’s move only adds to the momentum” for passing the Open App Markets Act (HR-5017/S-2710) “and further exposes rampant anticompetitive abuses in the app markets,” Blumenthal said in a statement. “The fox guarding the hen house status quo will remain until there are clear and enforceable rules for Apple and Google to play by.” Cowen’s Paul Gallant believes the settlement “won't derail the bipartisan interest in opening up app stores to different payment mechanisms.” He cited the Coalition for App Fairness’ criticisms of the proposal.