Apple loosens app store payment rules in lawsuit settlement

A judge will approve or disapprove the proposed settlement in a hearing set for Oct. 12

Apple has agreed to let developers of iPhone apps email their users about cheaper ways to pay for digital subscriptions and media.

Apple made the announcement Thursday as part of a preliminary settlement of a nearly two-year-old lawsuit filed on behalf of iPhone app developers in the U.S.

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The process circumvents a commission system that generates billions of dollars annually for the iPhone maker.

The concession covers emailed notifications, but does not allow in-app notifications.

It also addresses an issue raised by a federal court judge who is expected to soon rule on a separate case brought by Epic Games, maker of the popular video game Fortnite.

Under long-standing Apple rules, makers of iPhone apps were forbidden to email users with information on how to pay for services outside the app, which would circumvent Apple commissions of 15% to 30%.

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The concession now opens one way for app developers to more aggressively encourage its users to pay in other ways, so long as the companies obtain consumer consent.

Apple will also set up a $100 million fund to pay thousands of app developers covered in the lawsuit sums ranging from $250 to $30,000. App developers will get more flexibility to set different prices within their apps, expanding the options from about 100 to 500 choices.

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Being able to email users to explain why they should pay outside the app is a breakthrough for developers who have complained about Apple's commissions as a form of price gouging for years.

Tim Cook's payday

A judge will approve or reject the proposed settlement in a hearing set for Oct. 12.

In other Apple news, CEO Tim Cook is reportedly set to receive a huge payday this week in the final installment of the pay deal he signed a decade ago when he took over from Steve Jobs. 

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Cook will be given 5 million Apple shares worth about $750 million, according to Bloomberg.

The CEO’s reported current net worth is $1.5 billion.

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Apple stock's performance plays a big part in Cook's payment as shares have outperformed at least two-thirds of companies in the S&P 500 index over the past three years. 

Apple did not immediately reply to a request for comment. 

The Associated Press contributed to this report.