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Apple settles class action with some developers, allows more communication with users

The settlement with smaller developers comes amid the iPhone maker's legal battle with Fortnite maker Epic Games.

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Apple's been increasingly battling with developers over how it manages its App Store.

James Martin/CNET

Apple says it has reached a settlement with developers in a class action lawsuit against the tech giant over how it manages its App Store for the iPhone and iPad. Among the agreements, Apple said it will share more data with app developers, solidify some rules around communication with customers and establish a $100 million fund to help US developers who make less than $1 million annually.

Apple said that aside from the fund for developers -- of which nearly a third will go to lawyers and court costs associated with Thursday's settlement -- the commitments it made will apply to all developers on its platform.

"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," Phil Schiller, Apple Fellow who oversees the App Store, said in a statement. 

The agreement in the case of Cameron et al v. Apple is separate from Apple's continued litigation with Fortnite developer Epic Games, but the proposed settlement will need approval from the judge in that case. Some of Apple's critics say they're disappointed by the settlement, saying it's largely a win for Apple because many of the concessions hinge on keeping existing plans in place or on clarifying App Store rules it hadn't consistently enforced.

"This offer does nothing to address the structural, foundational problems facing all developers, large and small, undermining innovation and competition in the app ecosystem," Meghan DiMuzio, executive director of the Coalition for App Fairness, said in a statement. "Allowing developers to communicate with their customers about lower prices outside of their apps is not a concession and further highlights Apple's total control over the app marketplace." 

Epic Games, which helped form the coalition, declined to comment beyond DiMuzio's statement.

Spotify, which is pressing US and European regulators to rein in Apple and its App Store, also criticized the agreement. "Apple has been allowed to abuse their dominant position for years, and we continue to seek real reforms to ensure that companies can innovate and compete fairly, on a level playing field," the streaming music company said.

Apple's move to settle the developers' lawsuit marks the latest twist in its ongoing legal battles over the App Store. Apple has found itself increasingly battling app developers over the past few years. Those devs say the tech giant too tightly controls its App Store, which is the only way that consumers can install programs on their iPhones and iPads. 

While Apple's settlement is an interesting legal twist in that ongoing drama, it comes as the iPhone maker and Fortnite maker Epic await a ruling from Judge Yvonne Gonzalez Rogers following their battle in her California court room earlier this year.  In that case, Epic accuses Apple of acting as a monopoly, using its power over the App Store to force developers to accept high commission fees of up to 30% for in-app purchases. While that all sounds like a petty argument over who makes how much money when we buy things on our phones, the outcome could upend the way Apple does business and change the way we get and pay for apps on our devices.

Apple isn't the only company that Epic is fighting with over these issues. The Fortnite game maker also sued Google last year in a similar disagreement over the handling of payments. Lawmakers and regulators have joined in too, pushing Apple to justify its commissions and its tight control over its platform, while probing Google's behavior as well. 

As part of the agreement, Apple also promised it would add more features to its developer program. For example, Apple said it will allow developers to choose from among 500 price points for apps and in-app purchases -- up from fewer than 100 before. It also promised it wouldn't change its Apple Store search system or its small business pricing programs "for at least the next three years." 

Though the proposed settlement does allow developers to communicate with users by email, Apple said it will not allow developers to add information in apps that points people to cheaper subscriptions or cheaper alternatives to pay for items outside the App Store.

CNET's Joan E. Solsman contributed to this report.