Email Reveals Apple Lowered Fee to Get Amazon Prime Video on App Store
Tech moguls were grilled by Congress yesterday, including four CEOs: Apple’s Tim Cook, Facebook’s Mark Zuckerberg, Amazon’s Jeff Bezos and Google’s Sundar Pichai.
Various subjects were addressed. For example, Rep. Val Demings (D-Florida) accused Google’s Pichai of participating in a “bait-and-switch” by combining DoubleClick’s pseudonymous data about users with personally identifiable information.
Other CEOs also came under fire, but one notable discovery on the Apple front was the company’s alleged monopolistic App Store practices, including Apple’s sweetheart deal with Amazon Prime Video, reports 9to5mac.
During the hearings, Apple’s Tim Cook insisted every developer is treated the same. But the Amazon Prime Video app deal contradicts his testimony.
The trade explains the Amazon Prime Video app was one of the last major streamers to join Apple TV. It was such a big deal, Apple dedicated stage-time in 2017 to trumpet the alliance.
Now, the App Store routinely takes a 30% cut of revenue. But an email between Jeff Bezos and Apple SVP Eddy Cue sent in late 2016, reveals a different scenario. Cue summarizes the deal for Amazon’s Bezos, writing: “Amazon Prime Video app in iOS and Apple TV — 15% revenue share for customers that signup using the app (uses our payment)” and “upsell streaming services (e.g. Showtime) in your app — pay only 15% when it’s a subscriber who originally signed up through us.”
In short, Amazon got preferential treatment. The Apple Store arrangement for subscriptions is that Apple’s receives 30% of the money for the first subscribed year. After that, it drops to 15%. Here, Amazon was keeping most of the revenue from inception.
Conversely, other big companies and indie developers have to fork over 30% to the App Store.
In addition, the trade notes, when Amazon began selling TV shows and movies through its iOS and tvOS app for the first time, it wasn’t forced to use Apple In-App Purchase for these transactions.
Rep. Jamie Raskin (D-Maryland), a member of the House Committee on the Judiciary, Subcommittee on Antitrust, Commercial and Administrative Law, also quizzed Amazon’s Bezos on why he has kept HBO Max’s app unavailable on Amazon Fire TV devices.