Highlights:
- Apple offering subsite on App Store fee to Amazon
- Apple wants to onboard Prime Video
- Tim Cook, however, denies the claims after being grilled for uneven App Store rules for developers
Apple has cut the App Store commission for Amazon by 50% to get the Prime Video app on iOS and Apple TV devices, as per the documents which were released as part of the ongoing US Congressional anti-trust hearings. Going by the emails, Apple has agreed to take only 15% of revenue on Amazon Prime Video subscriptions through the application instead of the 30% revenue it charges from all the developers.
During the hearing, Chief Executive Officer (CEO) Time Cook claimed that Apple applies “rules to all developers evenly.”
Bloomberg reported that the Chief Executive Officer of Amazon Jeff Bezos and the Senior Vice President of Apple Eddy Cue directly negotiated the deal.
Based on the emails of Cue, Apple has agreed to take on 15% cur from the revenues earned via Prime Video app on the App Store and said it will not take any revenue from the customers who sign-up from anywhere else or have already subscribed before installing the Prime Video app via the App Store.
Talking about all the other developers, Apple generally charges 30% cut on an app subscription made via its platform and then the revenue cut drops to 15% after the first year of the listing. The committee has vocally criticised Apple for having too much control over app developers and the rules and fees which have not been equal for all the developers. Apple was also accused of blunting the competition and allegations of not all apps on its platforms getting the equal treatment were also made.
Now we know how Apple convinced Amazon to finally put Prime Video on the App Store in 2017: Apple agreed to only take 15% of revenue from Prime Video subscriptions made on iOS, versus the 30% they were taking from others. https://t.co/vscPLYKFe2 pic.twitter.com/75e46VGiai
— Mark Gurman (@markgurman) July 29, 2020
Having said this, Tim Cook has refused all of these allegations saying, “That is not correct. We treat every developer the same.” The documents which were released by the committee, however, also showed the conversations between Apple and Amazon regarding the 2018 deal for Apple to officially sell its products on the Amazon website.
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Amazon was reported to get $3.2 billion from the deal, which includes $1.1 billion just from the sales of the iPhone alone.
Earlier in 2020 when the Amazon Prime Video began allowing the in-app rentals and purchases on iOS and Apple TV Devices it was reported that Apple was allowing Amazon to process the payments through its own stored payment methods which the firm also allowed Canal+ and Altice One to do.
At that time, Apple said, “On qualifying premium video entertainment apps such as Prime Video, Altice One and Canal+, customers have the option to buy or rent movies and TV shows using the payment method tied to their existing video subscription” in the statement.
