As part of yesterday’s grand tech monopoly court hearing, the court has released many pages of documentation to back up its claims against alleged monopolistic practices from the Apple App Store. One of these emails sheds light on Apple’s deal with Amazon.
During the process, Apple CEO Tim Cook said they treat all developers the same way, but the details of the Amazon Prime Video deal seem to go against that …
The Amazon Prime Video app was one of the last major reservations to join Apple TV. Apple would eventually spend time on stage during WWDC 2017 to announce the partnership with Amazon.
In an email between Jeff Bezos and Eddy Cue sent in late 2016, Cue refers to a previous meeting with the Amazon CEO and summarizes the agreement between the two companies.
It seems very clear that Apple was arranging different financial terms with Amazon. Apple would receive 15% of the revenue from subscriptions made through the app, and 15% from third-party Amazon channels sold through the app when the original subscriber used Apple’s payment processing.
The standard App Store subscription agreement is that Apple receives 30% of the money for the first year of a subscription. If the customer continues the subscription beyond one year, Apple’s cut falls to 15%. But the terms established by Cue indicate that Amazon kept 85% of the money from the first day.
Earlier this year, Amazon’s special relationship with the App Store made headlines when Amazon started selling TV shows and movies through its iOS and tvOS app for the first time. Amazon was not required to use the in-app purchase for these transactions if the user’s account was already associated with a credit card. In a statement at the time, Apple said this was part of an “established program” to rate entertainment video applications. However, Apple finally decides which apps can qualify, which is essentially another form of special offers.
The relationship between Apple and Amazon is not the only instance where Apple offers terms to companies that general developers cannot access. Many high-profile apps on the App Store are granted special rights that are not available to smaller developers, such as relaxing sandboxing restrictions to allow Microsoft to bring the Office suite to the Mac App Store.
An application platform where everyone was really treated in the same way is simply unrealistic. Of course, Apple will always have to try to meet the needs of the most popular applications on their devices with technical support, extensive application review processes and the like. Apple should be honest about that reality. Getting Tim Cook to say everyone is treated equally when clearly not the case is not a good thing.
This is especially itchy when special financial deals are leaked, like the email between Bezos and Cue. Meanwhile, the App Store’s rank and file, large companies, and independent developers alike, should stay on the sidelines and try to make a sustainable business where they are forced to give more than 30% of their income to Apple.
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