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Apple's iPhone developer agreement - are the terms reasonable?

Apple’s iPhone developer agreement has been criticised for being unreasonably in favour of Apple over developers. This criticism is not surprising or unfounded particularly when you consider the more open and permissive approach of the Android platform. However such licence agreements are often drafted strongly in the vendor's favour and are rarely negotiable. This leaves developers and their corporate customers with a simple choice: accept the terms and associated risks as they are, or do not enable your app for the Apple platform.

The Apple agreement gives Apple broad rights to control the way developers use its software and to determine the requirements for distribution of Apps on the App Store, but it imposes few obligations on Apple to ensure its software meets any agreed quality standards.

The key issues in the Apple agreement may be summarised as follows:

  • No warranty – Apple provides no warranty for the performance of its software. As a result, it is under no obligation to provide updates to correct defects, even when a defect could significantly interfere with the use of the software. The absence of a warranty poses a risk to App developers who could be forced to wait indefinitely for Apple to provide an update to correct a defect that is blocking their development. 
  • No backwards compatibility – any software updates that Apple provides do not necessarily support the same features or interfaces that existed in the original software. This means that developers could be required to significantly change their App to keep pace with Apple. From Apple's perspective, this avoids any obligation to support legacy software indefinitely but can cause significant compatibility issues for developers as well as requiring their customers to pay them to support continuous development of their App. 
  • App Store requirements may change – Apple can change the requirements for the App Store at any time and without notice. Existing Apps may then need to be changed to continue to be compliant. As with backwards compatibility, not knowing when or what may change to the App Store requirements puts a constant obligation on developers to keep up with any developments. They also need to be quick to apply them to avoid customer and end user dissatisfaction. 
  • Terms may change at any time – Apple may impose new licensing terms on developers at any time. If developers do not accept the new terms, Apple can terminate the agreement. This will have the effect that developers who are in the middle of developing a new App will have little choice but to agree to any changes in terms that Apple proposes if they want to continue to use the software, regardless of how onerous the terms may be.
  • No obligation regarding speed of App reviews – Apple can take as long as it wants to consider whether an App or App update can be distributed on the App Store. This will be a problem for developers and their customers who will want a return on their investment. It could also prevent developers from providing fixes to their end users promptly. This issue is particularly significant as the agreement itself prevents developers from using another distribution method. Developers therefore have no choice but to wait indefinitely for Apple to complete its review. 
  • Confidentiality – Information the developer submits to Apple in relation to the App will not be treated by Apple as confidential. This allows Apple to use information about the App for its own purposes, or to disclose the information to a developer's competitor without compensation. This term is likely to be of particular concern to developers and corporate customers who want to keep the features of their App confidential. Perhaps unsurprisingly, the agreement imposes extensive obligations on the developer to protect Apple's confidential information.

Comment

The terms outlined above are far from ideal from the developer's perspective and may be challenging for their corporate customers to accept from a risk and governance perspective. The reality is that many developers will have to continue to accept the terms, sometimes without question or risk end user dissatisfaction or lost revenue by not participating in developing Apps for Apple products and using the App Store.

As the Android platform's market share continues to increase it will be interesting to see if Apple is forced to reassess its strangle hold on its App platform and software or whether consumer demand for Apple products will continue to make acceptance of their terms a necessity.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at October 2015. Specific advice should be sought for specific cases. For more information see our terms & conditions on www.TLTsolicitors.com

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