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Apple’s seemingly inviolate store terms – long questioned for favoring Apple’s own services and apps – may well bend for those who have sufficient power to wield in their negotiations.
Chris Pedigo, SVP Government Affairs, DCN
In the recent congressional hearing in which the CEOs of Apple, Amazon, Facebook, and Google testified, it was revealed that Apple and Amazon have a very different arrangement regarding App store fees than are afforded to other app developers.
As part of the terms of that deal—according to an email (between Apple’s Senior VP Eddy Cue and Amazon CEO Jeff Bezos) uncovered by the House of Representatives Judiciary Committee, and reproduced below—Apple would:
- Reduce its fee for consumers who subscribed to Prime Video from 30% to 15%
- Completely waive its normal 15% fee for existing Prime Video subscribers
- Allow Amazon to use other payment systems outside of Apple
In other words, the deal grants Amazon a generous 85-15 percent revenue share for in-app subscriptions, whereas Apple typically takes a 30 percent cut of all in-app purchases.
In the hearing, when asked whether the arrangement afforded to Amazon is “available to any app developers,” Apple CEO Tim Cook responded that they are available to “anyone meeting the conditions.”
And now, Digital Content Next, a trade body representing the New York Times, the Washington Post, The Wall Street Journal and many other publishers, have sent a letter to Apple chief executive Tim Cook, asking him to “clearly define the conditions that Amazon satisfied for its arrangement so that DCN’s member companies meeting those conditions can be offered the same agreement.”
We would like to know what conditions our members — high quality digital content companies — would need to meet in order to qualify for the arrangement Amazon is receiving for its Amazon Prime Video app in the Apple App Store.
Jason Kint, CEO of Digital Content Next
“Nearly all of DCN’s members offer apps in the Apple App Store and, as noted above, many offer subscription-based access to a wide variety of content,” Kint writes. “The terms of Apple’s unique marketplace greatly impact the ability to continue to invest in high-quality, trusted news and entertainment particularly in competition with other larger firms.”
The letter is reproduced in part below.
“The letter is the latest shot in a high-stakes public battle over how much money developers must pay Apple when they sell content through apps distributed on the company’s devices. Epic Games Inc., the maker of popular videogame ‘Fortnite,’ sued Apple and Alphabet Inc.’s Google last week after the companies removed the game from their app marketplaces, accusing them of monopolistic behaviour,” says Benjamin Mullin in the Wall Street Journal.
“Other companies, including Facebook Inc., have taken shots at Apple over the terms of purchases made on its app in recent weeks. Facebook said last week that it asked Apple to reduce its 30 per cent app store “tax” in a product aimed at small businesses, adding that Apple dismissed the requests.”
The monopolistic behavior of big tech puts a wide range of industries – not the least of which is the news industry – at a distinct disadvantage. It is laudable that EU and American regulatory bodies are digging in and uncovering these anti-competitive behaviors. Talking trust is not enough. We need to level the playing field and transparency is a critical first step.
Chris Pedigo, SVP Government Affairs, DCN
