Apple cut Amazon’s App Store fee in half to entice Prime Video on to its iOS platforms
APPLE offered Amazon lower App Store fees to convince the ecommerce giant to launch its Prime Video app on the iPhone App Store, newly released documents have revealed.
An email sent by senior Apple executive Eddy Cue to Amazon chief execu- tive Jeff Bezos in 2016 shows Apple took a 15pc cut of people signing up for streaming services through Amazon’s Prime Video app when that customer signed up through an Apple device.
Apple typically charges a 30pc cut of all subscriptions made in the first year of an app being available in its App Store – a fee that has frustrated app developers in recent years.
The email was released ahead of a Congress hearing into alleged antitrust abuses by technology companies. Apple chief executive Tim Cook gave evidence at the hearing, as did Mr Bezos.
The reduced App Store fees for Amazon’s Prime Video app appear to have been part of a long-standing programme run to provide better fees for what it calls “premium subscription video entertainment providers”.
Apps including Prime Video, Altice One and Canal+ are all given preferential App Store rates for purchases as long as the apps have direct integration into Apple services such as Siri or its AirPlay 2 wireless speaker technology.
Other emails released on Wednesday included a 2011 email sent by Mr Cue to other Apple employees in that he suggested taking a 40pc cut of App Store purchases, a higher fee than the company’s 30pc cut. His colleague Jai Chulani replied to say that Apple “may be leaving money on the table if we just asked for about 30pc of the first year” of subscriptions in iPhone apps.
During the hearing, Hank Johnson, a Democrat from Georgia, suggested that Apple’s App Store review guidelines are changed on a whim to benefit the company and shut out smaller developers. “That is not correct,” Mr Cook said. “We treat every developer the same.” Apple has repeatedly denied that it engages in anti-competitive behaviour.
Hours after the hearing, Telegram, the messaging app, filed a formal antitrust complaint to the EU over Apple’s App Store.
Spotify and Rakuten have previously complained to the EU that the App Store’s 30pc fee on its smartphone store constitutes an unfair “app tax” that stifles competition.