Case 4:19-cv-03074-YGR Document 396 Filed 08/26/21 Page 1 of 37
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`
`
`Steve W. Berman (pro hac vice)
`Robert F. Lopez (pro hac vice)
`Theodore Wojcik (pro hac vice)
`HAGENS BERMAN SOBOL SHAPIRO LLP
`1301 Second Avenue, Suite 2000
`Seattle, WA 98101
`Telephone: (206) 623-7292
`Facsimile: (206) 623-0594
`steve@hbsslaw.com
`robl@hbsslaw.com
`tedw@hbsslaw.com
`
`Shana E. Scarlett (SBN 217895)
`Benjamin J. Siegel (SBN 256260)
`Ben M. Harrington (SBN 313877)
`HAGENS BERMAN SOBOL SHAPIRO LLP
`715 Hearst Avenue, Suite 202
`Berkeley, CA 94710
`Telephone: (510) 725-3000
`Facsimile: (510) 725-3001
`shanas@hbsslaw.com
`bens@hbsslaw.com
`benh@hbsslaw.com
`
`Interim Lead Class Counsel
`
`[Additional Counsel Listed on Signature Page]
`
`
`UNITED STATES DISTRICT COURT
`
`NORTHERN DISTRICT OF CALIFORNIA
`
`OAKLAND DIVISION
`
`
`DONALD R. CAMERON, et al.,
`
`
`
`
`
`Plaintiffs,
`
`
`
`APPLE INC.,
`
`
`
`
`
`Case No. 4:19-cv-03074-YGR
`
`DEVELOPER PLAINTIFFS’ MOTION
`FOR PRELIMINARY APPROVAL OF
`CLASS ACTION SETTLEMENT WITH
`APPLE INC.
`
`Date: October 12, 2021
`Time:
`2:00 p.m.
`Judge: Hon. Yvonne Gonzalez Rogers
`Location: Courtroom 1- 4th Floor
`
`
`
`
`
`
`
`Defendant.
`
`v.
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`
`
`
`
`010818-11 1604783v1
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`Case 4:19-cv-03074-YGR Document 396 Filed 08/26/21 Page 2 of 37
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`
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`NOTICE OF MOTION AND MOTION
`PLEASE TAKE NOTICE that on October 12, 2021, at 2:00 p.m. or as soon thereafter as
`the matter may be heard by the Honorable Yvonne Gonzalez Rogers of the United States District
`Court of the Northern District of California, located in Courtroom 1, at 1301 Clay Street, Oakland,
`CA 94612, Developer Plaintiffs will and hereby do move the Court pursuant to Federal Rules of
`Civil Procedure 23 for an order:
`1)
`preliminarily approving the proposed class action settlement with Apple
`Inc.;
`
`
`
`2)
`3)
`
`4)
`
`certifying the settlement class;
`appointing Hagens Berman Sobol Shapiro LLP as Class Counsel; and
`
`approving the manner and form of notice and proposed plan of allocation to
`class members.
`
`
`
`This motion is based on this Notice of Motion and Motion for Preliminary Approval of
`Settlement with Apple Inc., the following memorandum of points and authorities, the
`accompanying settlement agreement, the pleadings and papers on file in this action, and such other
`matters as the Court may consider.
`
`
`
`
`DEVELOPER PLS.’ MEMORANDUM ISO MOT. FOR
`PRELIM. APPROVAL OF CLASS ACTION SETTLEMENT –
`Case No. 4:19-cv-03074-YGR
`
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`Case 4:19-cv-03074-YGR Document 396 Filed 08/26/21 Page 3 of 37
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`
`
`I. 
`II. 
`
`III. 
`IV. 
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`TABLE OF CONTENTS
`PRELIMINARY STATEMENT ..................................................................................... 1 
`BACKGROUND ............................................................................................................. 2 
`A. 
`Procedural History ............................................................................................... 2 
`B. 
`The Settlement ..................................................................................................... 3 
`1. 
`The Settlement Negotiations ................................................................... 3 
`2. 
`The Settlement Consideration and Release of Claims ............................ 4 
`a. 
`Monetary Relief ........................................................................... 4 
`b. 
`Structural Relief ........................................................................... 5 
`c. 
`Settlement Release ....................................................................... 8 
`The Notice and Distribution Plan ............................................................ 9 
`3. 
`LEGAL STANDARD ................................................................................................... 10 
`THE SETTLEMENT WARRANTS PRELIMINARY APPROVAL ........................... 11 
`A. 
`The Settlements are Fair, Reasonable and Adequate. ....................................... 11 
`1. 
`The Class Has Been Zealously Represented. ........................................ 11 
`2. 
`The Settlement Agreement Resulted from Arm’s-Length Negotiations.
` ............................................................................................................... 11 
`The Settlement Represents Substantial Relief for the Class. ................ 12 
`The Settlement Treats Class Members Equitably. ................................ 14 
`The Settlement Satisfies the Remaining Factors Set Forth in the
`Northern District’s Procedural Guidance .............................................. 15 
`The Settlement Class Appropriately is Narrower than the Class
`a. 
`Pleaded in the Complaint. .......................................................... 15 
`The Settlement Release Tracks the Claims Alleged in the
`Complaint. ................................................................................. 17 
`Developer Plaintiffs Anticipate a Relatively High Claims Rate.
` ................................................................................................... 18 
`Angeion Was Selected as Settlement Administrator Through a
`Competitive Bidding Process. ................................................... 18 
`Counsel Will Request Reasonable Attorneys’ Fees and
`Reimbursement of Costs. ........................................................... 19 
`
`d. 
`
`e. 
`
`3. 
`4. 
`5. 
`
`b. 
`
`c. 
`
`DEVELOPER PLS.’ MEMORANDUM ISO MOT. FOR
`PRELIM. APPROVAL OF CLASS ACTION SETTLEMENT –
`Case No. 4:19-cv-03074-YGR
`
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`Case 4:19-cv-03074-YGR Document 396 Filed 08/26/21 Page 4 of 37
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`B. 
`
`3. 
`4. 
`
`Plaintiffs Intend to Request Reasonable Service Awards for
`Class Representatives. ............................................................... 21 
`Past Distributions ....................................................................... 22 
`g. 
`The Settlement Class Merits Certification. ....................................................... 23 
`1. 
`Rule 23(a): Numerosity ......................................................................... 23 
`2. 
`Rule 23(a): The Case Involves Questions of Law or Fact Common to
`the Class. ................................................................................................ 23 
`Rule 23(a): Plaintiffs’ Claims Are Typical of the Claims of the Class. 24 
`Rule 23(a): Plaintiffs Will Fairly and Adequately Represent the Interests
`of the Class. ........................................................................................... 24 
`Rule 23(b)(2): Injunctive Relief Is Appropriate for Entire Class. ......... 25 
`5. 
`Rule 23(b)(3): Common Questions of Fact or Law Predominate. ........ 25 
`6. 
`The Superiority Requirement is Met. .................................................... 26 
`7. 
`The Proposed Notice Program Satisfies Rule 23. ............................................. 26 
`C. 
`The Court Should Appoint Interim Co-Lead Counsel as Settlement Counsel. . 28 
`D. 
`Proposed Schedule for Notice and Final Approval ........................................... 28 
`E. 
`CONCLUSION ............................................................................................................. 28 
`
`f. 
`
`
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`V. 
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`DEVELOPER PLS.’ MOT. FOR PRELIM. APPROVAL OF
`SETTLEMENT WITH APPLE INC. – Case No. 4:19-cv-03074-
`YGR
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`Case 4:19-cv-03074-YGR Document 396 Filed 08/26/21 Page 5 of 37
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`
`
`TABLE OF AUTHORITIES
`
`FEDERAL CASES
`
`
`
`Page(s)
`
`In re Aftermarket Auto. Lighting Prods. Antitrust Litig.,
`276 F.R.D. 364 (C.D. Cal. 2011) ......................................................................................... 27
`
`Allapattah Servs. Inc v. Exxon Corp.,
`454 F. Supp. 2d 1185 (S.D. Fla. 2006) ................................................................................ 20
`
`Amador v. Baca,
`2020 WL 5628938 (C.D. Cal. Aug. 11, 2020) .................................................................... 21
`
`Amchem Prods., Inc. v. Windsor,
`521 U.S. 591 (1997) ...................................................................................................... 17, 26
`
`In re Anthem, Inc. Data Breach Litig.,
`327 F.R.D. 299 (N.D. Cal. 2018) .......................................................................................... 4
`
`In re Apple Pod iTunes Antitrust Litig.,
`2008 WL 5574487 (N.D. Cal. Dec. 22, 2008) .................................................................... 26
`
`B.K. by next Friend Tinsley v. Snyder,
`922 F.3d 957 (9th Cir. 2019) ............................................................................................... 24
`
`Brown v. Hain Celestial Grp., Inc.,
`2014 WL 6483216 (N.D. Cal. Nov. 18, 2014) .................................................................... 16
`
`Castro v. Sanofi Pasteur Inc.,
`134 F. Supp. 3d 820 (D.N.J. 2015) ...................................................................................... 26
`
`In re: Cathode Ray Tube (CRT) Antitrust Litig.,
`2015 WL 9266493 (N.D. Cal. Dec. 17, 2015) .................................................................... 14
`
`In re: Cathode Ray Tube (CRT) Antitrust Litig.,
`2016 WL 3648478 (N.D. Cal. July 7, 2016) ....................................................................... 12
`
`In re Checking Account Overdraft Litig.,
`830 F. Supp. 2d 1330 (S.D. Fla. 2011) ................................................................................ 20
`
`Churchill Vill., LLC v. Gen. Elec.,
`361 F.3d 566 (9th Cir. 2004) ............................................................................................... 27
`
`Congdon v. Uber Techs., Inc.,
`2019 WL 2327922 (N.D. Cal. May 31, 2019) ..................................................................... 22
`
`de Mira v. Heartland Emp’t Serv., LLC,
`2014 WL 1026282 (N.D. Cal. Mar. 13, 2014) .................................................................... 19
`DEVELOPER PLS.’ MOT. FOR PRELIM. APPROVAL OF
`SETTLEMENT WITH APPLE INC. – Case No. 4:19-cv-03074-
`YGR
`
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`Case 4:19-cv-03074-YGR Document 396 Filed 08/26/21 Page 6 of 37
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`
`
`Garner v. State Farm Mut. Auto Ins. Co.,
`2010 WL 1687832 (N.D. Cal. Apr. 22, 2010) ....................................................................... 3
`
`Goertzen v. Great Am. Life Ins. Co.,
`2017 WL 8294291 (N.D. Cal. Nov. 6, 2017) ...................................................................... 10
`
`Hanlon v. Chrysler Corp.,
`150 F.3d 1011 (9th Cir. 1998) ............................................................................................. 25
`
`Hesse v. Sprint Corp.,
`598 F.3d 581 (9th Cir. 2010) ............................................................................................... 18
`
`In re High-Tech Employee Antitrust Litig.,
`985 F. Supp. 2d 167 (N.D. Cal. 2013) ........................................................................... 24, 27
`
`Hubbard v. RCM Techs. (USA), Inc.,
`2020 WL 6149694 (N.D. Cal. Oct. 20, 2020) ..................................................................... 24
`
`In re Hyundai & Kia Fuel Econ. Litig.,
`926 F.3d 539 (9th Cir. 2019) (en banc) ................................................................... 17, 23, 26
`
`In re Ikon Office Sols., Inc., Secs. Litig.,
`194 F.R.D. 166 (E.D. Pa. 2000) .......................................................................................... 20
`
`Lerwill v. Inflight Motion Pictures, Inc.,
`582 F.2d 507 (9th Cir.1978) ................................................................................................ 25
`
`In re Linerboard Antitrust Litig.,
`2004 WL 1221350 (E.D. Pa. June 2, 2004) ................................................................... 20, 21
`
`Linney v. Cellular Alaska P’ship,
`151 F.3d 1234 (9th Cir. 1998) ............................................................................................. 21
`
`In re Lithium Ion Batteries Antitrust Litig.,
`2020 WL 7264559 (N.D. Cal. Dec. 10, 2020) ........................................................ 12, 13, 14
`
`In re Nat’l Collegiate Athl. Grant-in-Aid Cap Antitrust Litig.,
`2017 WL 6040065 (N.D. Cal. Dec. 6, 2017) ...................................................................... 20
`
`In re NCAA Student-Athlete Name & Likeness Licensing Litig.,
`2013 WL 5979327 (N.D. Cal. Nov. 18, 2013) .................................................................... 26
`
`Nitsch v. DreamWorks Animation SKG Inc.,
`2017 WL 399221 (N.D. Cal. Jan. 19, 2017) ........................................................................ 11
`
`In re Online DVD-Rental Antitrust Litig.,
`779 F.3d 934 (9th Cir. 2015) ............................................................................................... 19
`
`Pecover v. Elec. Arts, Inc.
`2010 WL 8742757 (N.D. Cal. 2010) ................................................................................... 24
`DEVELOPER PLS.’ MOT. FOR PRELIM. APPROVAL OF
`SETTLEMENT WITH APPLE INC. – Case No. 4:19-cv-03074-
`YGR
`
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`Case 4:19-cv-03074-YGR Document 396 Filed 08/26/21 Page 7 of 37
`
`
`
`In re Polyurethane Foam Antitrust Litig.,
`2015 WL 1639269 (N.D. Ohio Feb. 26, 2015) ................................................................... 20
`
`In re Resistors Antitrust Litig.,
`2020 WL 2791922 (N.D. Cal. Mar. 24, 2020) .................................................................... 14
`
`In re Static Random Access (SRAM) Antitrust Litig.,
`2008 WL 4447592 (N. D. Cal. Sept. 29, 2008) ................................................................... 27
`
`Staton v. Boeing Co.,
`327 F.3d 938 (9th Cir. 2003) ............................................................................................... 21
`
`In re Toyota Motor Corp. Unintended Acceleration Mktg., Sales Pracs., &
`Prod. Liab. Litig.,
`2013 WL 12327929 (C.D. Cal. July 24, 2013) ................................................................... 13
`
`In re Urethane Antitrust Litig.,
`2016 WL 4060156 (D. Kan. July 29, 2016) ........................................................................ 20
`
`Vizcaino v. Microsoft Corp.,
`290 F.3d 1043 (9th Cir. 2002) ............................................................................................. 21
`
`In re Vitamins Antitrust Litig.,
`2001 WL 34312839 (D.D.C. July 16, 2001) ....................................................................... 20
`
`In re Volkswagen “Clean Diesel” Mktg., Sales Pracs., & Prod. Liab. Litig.,
`229 F. Supp. 3d 1052 (N.D. Cal. 2017) ............................................................................... 12
`
`Wal-Mart Stores, Inc. v. Dukes,
`564 U.S. 338 (2011) ............................................................................................................ 24
`
`FEDERAL STATUTES
`
`Sherman Act, 15 U.S.C. § 1 ........................................................................................................ 2
`
`FEDERAL RULES
`
`Federal Rule of Civil Procedure 23 .................................................................................... passim
`
`OTHER AUTHORITIES
`
`2 William B. Rubenstein, Newberg on Class Actions § 4:63 (5th ed. 2018) ............................ 23
`
`University of San Francisco School of Law, 2018 Antitrust Annual Report:
`Class Action Filings in Federal Court (May 2019) ............................................................ 20
`
`Eisenberg, Miller & Germano, Attorneys’ Fees in Class Actions: 2009-2013, 92
`N.Y.U. L. Rev. 937, 952 (2017) .......................................................................................... 20
`
`Procedural Guidance for Class Action Settlements (N.D. Cal.) (2018) ................................... 16
`DEVELOPER PLS.’ MOT. FOR PRELIM. APPROVAL OF
`SETTLEMENT WITH APPLE INC. – Case No. 4:19-cv-03074-
`YGR
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`Case 4:19-cv-03074-YGR Document 396 Filed 08/26/21 Page 8 of 37
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`
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`I.
`PRELIMINARY STATEMENT
`Plaintiffs Donald Cameron and Pure Sweat Basketball, Inc. (“Developer Plaintiffs”), on
`behalf of themselves and other members of the proposed Settlement Class, are pleased to report
`their proposed Settlement with Apple Inc. The Settlement, if approved, would resolve the claims
`of a Settlement Class consisting of approximately 67,000 iOS developers earning more than $0 but
`less than $1 million from transactions annually in the App Store during the Class Period. Nearly
`all domestic iOS developers with paid app transactions—more than 99 percent—fall within the
`Settlement Class and would recover under the Settlement. These small developers are the
`backbone of the iOS app economy, developing apps of all types that improve the functionality and
`performance of iOS devices. And they all stand to recover substantial benefits under the
`Settlement, both from direct monetary payments and structural relief that, going forward, will make
`iOS app development a more productive enterprise.
`The proposed Settlement establishes a $100 million non-reversionary monetary fund from
`which Settlement Class members will receive direct distributions. Individual Settlement Class
`Members will receive a minimum payment of $250; higher payments will be tiered based on
`historic proceeds, with the highest minimum payment tier providing $30,000. The Settlement also
`contains valuable structural relief. It acknowledges (properly) that this lawsuit was one driver
`behind Apple’s 2021 launch of its Small Business Program, under which small developers qualify
`for a lower 15 percent commission rate. Under the Settlement, Apple has committed to maintain
`the Small Business Program’s 15 percent rate for at least another three years. Apple has also
`committed to revise its “anti-steering” Guidelines to permit app developers to communicate
`directly with their customers regarding alternative payment options. Apple has further agreed to
`institute and maintain a range of structural reforms that will enable developers to better create,
`distribute, and monetize their apps. These structural reforms are valuable. Developer Plaintiffs
`conservatively estimate that the Small Business Program element of the Settlement alone adds at
`least $35.44 million in value.
`The Settlement follows over two years of contentious litigation, including voluminous class
`certification briefing supported by multiple expert reports, and extensive discovery before that. It
`DEVELOPER PLS.’ MEMORANDUM ISO MOT. FOR
`PRELIM. APPROVAL OF CLASS ACTION SETTLEMENT –
`Case No. 4:19-cv-03074-YGR
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`Case 4:19-cv-03074-YGR Document 396 Filed 08/26/21 Page 9 of 37
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`
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`is the product of arm’s-length negotiations among experienced counsel under the auspices of one of
`the nation’s most respected mediators, the Hon. Layn Phillips (U.S.D.J. Ret.). The Settlement
`terms are fair, reasonable, and more than adequate. The recovery for the Settlement Class is well
`within the range of approval amounts, and settlement at this stage eliminates the risk of a litigated
`outcome that could return less value, or nothing at all, to app developers.
`Developer Plaintiffs respectfully request an Order that: (1) preliminarily approves the
`proposed Settlement; (2) certifies the Settlement Class; (3) appoints Hagens Berman Sobol Shapiro
`LLP as Settlement Class Counsel; and (4) approves the manner and form of notice and proposed
`plan of distribution to Settlement Class members.
`II.
`BACKGROUND
`
`A.
`
`Procedural History
`The Court is well-versed in the history of this litigation. Developer Plaintiffs recount here
`only the primary events.
`Developer Plaintiffs filed their initial complaint on June 4, 2019, and their Consolidated
`Amended Complaint on September 31, 2019. See ECF No. 53. Asserting claims under the
`Sherman Act and California’s Unfair Competition Law, Developer Plaintiffs contend that Apple
`monopolizes a relevant market for iOS app and in-app-product distribution services, charging iOS
`app developers supracompetitive commissions.
`Apple filed its answer on November 11, 2019. See ECF No. 74. The Court subsequently
`coordinated this matter with In re Apple iPhone Antitrust Litigation, Case No. 4:11-cv-6714
`(“Consumer Action”) (and later with Epic Games, Inc. v. Apple, Inc., Case No. 4:20-cv-5640
`(“Epic Action”)) for discovery purposes, and substantial discovery ensued. More than 5 million
`documents and 20 million pages have been produced in this litigation. The parties collectively
`have taken over fifty depositions, including depositions of Apple’s senior management. Following
`protracted negotiations, and motion practice, Apple produced a 13-terabyte transactional dataset
`that Developer Plaintiffs and their experts have extensively analyzed.
`Developer Plaintiffs moved for class certification on June 1, 2021, just one week after
`closing arguments in the Epic trial. See ECF No. 331. Developer Plaintiffs’ motion was supported
`DEVELOPER PLS.’ MOT. FOR PRELIM. APPROVAL OF
`SETTLEMENT WITH APPLE INC. – Case No. 4:19-cv-03074-
`YGR
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`Case 4:19-cv-03074-YGR Document 396 Filed 08/26/21 Page 10 of 37
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`by detailed expert reports from Professor Einer Elhauge, Professor Nicholas Economides, and
`Christian Tregillis, CPA. On August 10, 2021, after deposing both named Plaintiffs and each of
`Developer Plaintiffs’ experts, Apple filed its opposition to class certification along with seven
`supporting expert reports. See ECF No. 376. Apple simultaneously moved to compel Developer
`Plaintiffs to produce a “trial plan” and to exclude certain of Developer Plaintiffs’ experts’ opinions
`under Daubert. See ECF Nos. 371 & 380. Developer Plaintiffs filed administrative motions to
`strike both of these motions. See ECF Nos. 382 & 384.
`As this chronology attests, the parties have devoted enormous resources to develop a large
`discovery record, while aggressively litigating their claims and defenses. Developer Plaintiffs also
`stand in the unusual position of having seen not only Apple’s fully developed opposition to class
`certification, but the bench trial of one developer’s claims (Epic). Developer Plaintiffs understand
`the strengths and vulnerabilities of their case.
`B.
`The Settlement
`1.
`The Settlement Negotiations
`The parties engaged in four remote mediation sessions with the Hon. Layn Phillips
`(U.S.D.J. Ret.). The first two occurred in June and July of 2020. See Berman Decl. at ¶ 5.1 The
`sessions were vigorous and detail-driven, but the parties could not reach agreement. After a year of
`active litigation, the parties met again on July 28, 2021, and again on August 13, 2021, with the
`latter session occurring days after Apple submitted its opposition to class certification. Discussions
`were more sharply focused in this second round of mediation and, by the end of August 13, 2021,
`the essential contours of the Settlement had been reduced to a Memorandum of Understanding.
`See id.
`The Settlement is the product of hard bargaining by experienced counsel, which, coupled
`with the active involvement of a skilled mediator, supports a “presumption that the settlement is
`fair and reasonable.” Garner v. State Farm Mut. Auto Ins. Co., 2010 WL 1687832, at *13 (N.D.
`
`
`1 “Berman Decl.” means the Declaration of Steve W. Berman in Support of Developer
`Plaintiffs’ Motion for Preliminary Approval of Class Action Settlement with Defendant Apple Inc.,
`filed concurrently herewith.
`DEVELOPER PLS.’ MOT. FOR PRELIM. APPROVAL OF
`SETTLEMENT WITH APPLE INC. – Case No. 4:19-cv-03074-
`YGR
`
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`Case 4:19-cv-03074-YGR Document 396 Filed 08/26/21 Page 11 of 37
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`Cal. Apr. 22, 2010); see also In re Anthem, Inc. Data Breach Litig., 327 F.R.D. 299, 327 (N.D. Cal.
`2018) (noting that “the Settlement [in that matter] was negotiated at arms’ length over several full-
`day mediation sessions with the help of an experienced mediator—Judge Layn Phillips,” and that
`“Courts in this district have recognized that the assistance of an experienced mediator in the
`settlement process confirms that the settlement is non-collusive.”).
`2.
`The Settlement Consideration and Release of Claims
`The Settlement provides for monetary and structural relief, both in exchange for a release of
`claims. These elements of the Settlement are addressed in turn below.
`a.
`Monetary Relief
`Apple has committed to pay $100,000,000 into a Small Developer Assistance Fund. See
`Berman Decl., Ex. A at § 5.3. The fund is non-reversionary; under no circumstances will any
`portion of the fund return to Apple. See id. at § 6.6. All Members of the Settlement Class will
`receive a minimum direct distribution from the Small Developer Assistant Fund in the amount of
`$250, with higher distribution amounts available to Settlement Class Members based on their
`historic proceeds from distributing apps in the App Store.
`
`PROCEEDS TIER
`
`$0.01 to $100
`$100.01 to $1,000.00
`$1000.01 to $5,000.00
`$5,000.01 to $10,000.00
`$10,000.01 to $50,000.00
`$50,000.01 to $100,000.00
`$100,000.01 to $250,000.00
`$250,000.01 to $500,000.00
`$500,000.01 to $1,000,000.00
`Over $1,000,000.00
`
`PERCENTAGE OF THE
`SETTLEMENT CLASS2
`51%
`23%
`11%
`4%
`6%
`2%
`2%
`1%
`1%
`1%
`
`MINIMUM PAYMENT
`
`$250.00
`$500.00
`$1,000.00
`$1,500.00
`$2,000.00
`$3,500.00
`$5,000.00
`$10,000.00
`$20,000.00
`$30,000.00
`
`
`
`2 See Berman Decl. ¶ 6.
`DEVELOPER PLS.’ MOT. FOR PRELIM. APPROVAL OF
`SETTLEMENT WITH APPLE INC. – Case No. 4:19-cv-03074-
`YGR
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`Case 4:19-cv-03074-YGR Document 396 Filed 08/26/21 Page 12 of 37
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`Importantly, the minimum payment amounts set forth above are just that, minimums. They
`
`would apply only if every member of the Settlement Class submits an approved claim. While the
`Parties have developed a robust and streamlined claims process, see infra at Section II.B.3, a 100-
`percent claims rate is not likely. The proposed Settlement Administrator, Angeion Group LLC
`(“Angeion”), estimates a claims rate of 35 percent in this matter. See Weisbrot Decl. at ¶ 35.3 In
`that event, the minimum payment amounts will increase proportionally in each tier. See Berman
`Decl., Ex. A at § 6.3.
`The Settlement proposes that any leftover funds after distributions to Settlement Class
`Members (for example, from uncashed checks) will be used as a cy pres distribution to Girls Who
`Code, a nonprofit organization that works to close the gender gap in computer science and
`programming. See id. at § 6.6. Apple has advised Developer Plaintiffs that both the company and
`its counsel have supported this organization in financial and other ways in the past.
`b.
`Structural Relief
`In addition to the monetary relief just described, the Settlement provides for important and
`valuable structural relief in five areas of particular concern to the iOS developer community.
`Commissions / Small Business Program. Through the Settlement, Apple acknowledges
`that this litigation (together with other considerations) was a factor in Apple’s January 1, 2021
`launch of the Small Business Program. See id. at § 2.3. Under the Small Business Program,
`existing and new developers earning up to $1,000,000.00 in proceeds annually are entitled upon
`enrollment to a reduced commission rate of 15 percent on paid apps and in-app purchases. See id.
`Under the Settlement, Apple has agreed to maintain the 15-percent commission tier for U.S.
`developers enrolled in the Small Business Program for at least three years after Final Approval.
`See id. at § 5.1.1. This is a valuable assurance to the Settlement Class.
`
`
`3 “Weisbrot Decl.” means the Declaration of Steven Weisbrot of Angeion Group Regarding the
`Proposed Notice Program, filed concurrently herewith.
`DEVELOPER PLS.’ MOT. FOR PRELIM. APPROVAL OF
`SETTLEMENT WITH APPLE INC. – Case No. 4:19-cv-03074-
`YGR
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`Case 4:19-cv-03074-YGR Document 396 Filed 08/26/21 Page 13 of 37
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`Named Plaintiff Pure Sweat Basketball’s CEO, Richard Czeslawski, addresses the benefits
`in an accompanying declaration. As Mr. Czeslawski explains, the Settlement “furthers the
`substantial direct benefits of the Small Business Program . . . by locking in the benefits of the
`Reduced Commission, from 30% to 15%, for at least three more years, providing invaluable
`business planning value.” Czeslawski Decl. at ¶ 7.4 As elaborated below, Professor Nicholas
`Economides estimates that the Small Business Program, and Apple’s three-year commitment to
`maintain its 15% tier, will save the Settlement Class $177.2 million in commissions. See infra at
`Section IV.A.3.
`Steering. Apple has agreed to revise its App Store Guidelines to permit developers of all
`app categories to communicate with consenting customers outside their app, including via email
`and other communication services, about purchasing methods other than in-app purchase. See
`Berman Decl., Ex. A at § 5.1.3. Under the App’s Store existing Guidelines, developers may not
`use contact information (emails, phone numbers, etc.) obtained within an app to contact their user
`base outside the app. As a practical matter, this prevents developers from alerting their customers
`to alternative payment options. The proposed Settlement lifts this restriction, and it does so for all
`app categories.
`This injunctive relief is extremely valuable. By informing customers of alternative
`payment options, developers can avoid paying Apple’s commissions and, moreover, exert
`competitive pressure on Apple to discipline its pricing. Mr. Czeslawski considers this a “game
`changer” because the “ability to effectively communicate with [his] customers is the lifeblood of
`[his] business.” See Czeslawski Decl., at ¶¶ 9, 12. Mr. Czeslawski anticipates that Pure Sweat
`Basketball, and other Settlement Class Members, will “take full advantage of this change in
`Customer Communications as a way to further reduce the commissions paid to Apple.” Id. at ¶ 12;
`see also Economides Decl. at ¶ 24 (describing this structural relief as “a major change from
`
`
`4 “Czeslawski Decl.” means the Declaration of Richard Czeslawski in Support of Deverloper
`Plaintiffs’ Motion for Preliminary Approval of Class Action Settlement with Apple, Inc., filed
`concurrently herewith.
`DEVELOPER PLS.’ MOT. FOR PRELIM. APPROVAL OF
`SETTLEMENT WITH APPLE INC. – Case No. 4:19-cv-03074-
`YGR
`
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`Case 4:19-cv-03074-YGR Document 396 Filed 08/26/21 Page 14 of 37
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`Apple’s previous policies [that] could bring substantial benefits to developers”).5 Under the
`Settlement, this modification to Apple’s App Store Guidelines must be maintained for at least three
`years from Final Approval.
`Discoverability. For at least three years after Final Approval, Apple will continue to
`“conduct robust experimentation to drive continuous improvement” in App discoverability,
`including in ways that will “give new and high-quality apps a chance to be found.” See Berman
`Decl., Ex. A at § 5.1.2. Innovations on discoverability are important to iOS developers, many of
`which have developed high-quality apps that, for reasons beyond their control, have not gained
`prominence in the App Store or its search results. Named Plaintiff Donald Cameron is one such
`developer. Like other small developers, Mr. Cameron has “a limited budget for advertising and
`promotion” and while he believes he has created “one of the best baby naming apps available,” it
`has been difficult for him to get the app discovered. See Ca