What you need to know
- A trade group has drafted a letter arguing against Apple's App Store policies.
- The letter points to Apple's deal with Amazon as favoritism that other developers cannot enjoy.
- It also argues against the company's fee structure.
News publishers are jumping on the antitrust train against Apple.
Reported by 9to5Mac, a trade group that represents major newspapers like the Washington Post, New York Times, and Wall Street Journal have written a letter that puts pressure on Apple's 30% fee for in-app purchases on the App Store.
Specifically, the letter seeks to punch a hole in Apple's argument that all developers are treated equally on the platform. The letter points to Apple's deal with Amazon, where Apple agreed to drop its 30% in the first year for new subscribers and also allowed Amazon to use its own payment system
Sometime in 2017, Apple and Amazon, two giant platform companies, struck a deal where Amazon Prime Video would be available on Apple TV and Apple products would be available on Amazon. As part of the terms of that deal, Apple would reduce its fee for consumers who subscribed to Prime Video from 30% to 15%. For existing Prime Video subscribers, Apple agreed to completely waive its normal 15% fee. The cherry on top for Amazon was that they could use other payment systems outside of Apple.
The letter complains that Amazon is getting specialized treatment that is not available to all developers on the App Store. Tim Cook assured that deals like Amazon's are "available to anyone meeting the conditions," but did not specify what those conditions exactly are. In response, the trade group is asking for the terms of the deal to be publicized.
So, this week, DCN's CEO Jason Kint, wrote to Cook to publicly call for the disclosure of the terms of this deal so that "anyone meeting the conditions" can apply for them. This is a key test for Apple: Will app developers of any size (the ones for which Apple claims to be competing) be able to get the same terms? Did Cook speak the truth before Congress? Will Apple's behavior match its trust-based branding?
The letter also argues that Apple's fee is unfair because of its set percentage. The trade group argues that Apple should not be able to collect the same percentage of revenue from a newspaper that is able to command a higher price for their publication.
Apple's "non-negotiable terms" have been an issue for some time. The company charges 30% commission on any app store purchase. That fee reduces earnings potential for app developers while also driving up prices for consumers. Most merchants charge a flat fee. Apple takes 30% of the sale of, say, a $25 newspaper subscription. It also takes 30% for the sale of a $500 newspaper subscription. Thus, the more the publisher is able to charge for its service then the more Apple benefits, despite providing the same service.
Apple is fighting against a number of antitrust investigations and lawsuits. Epic Games' lawsuit against Apple already has a new judge who is presiding over a number of related cases against the company.