During a hearing before the House antitrust subcommittee on Wednesday, Apple CEO Tim Cook testified that “we apply the rules to all developers evenly” when it comes to the App Store. But documents revealed by the subcommittee’s investigation show Apple senior vice president Eddy Cue offered Amazon a unique deal in 2016: Apple would only take a 15 percent fee on subscriptions that signed up through the app, compared to the standard 30 percent that most developers must hand over.
An email from Cue to Amazon CEO Jeff Bezos lists the terms negotiated:
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
That meeting took place in 2016, and at the time, Bezos said he was waiting for “acceptable business terms” before launching the Prime Video app on Apple’s platforms. Pressed for whether the terms may have included a reduction in the 30 percent App Store cut, Bezos told The Verge’s Nilay Patel that “private business discussions should stay private.”
Earlier this year, Amazon’s Prime Video iOS and Apple TV apps started allowing customers to make in-app purchases, including renting and buying movies and TV shows. The change was a huge shift for Amazon, which previously would not allow users to rent or buy content on the Prime Video app in the App Store. According to Bloomberg, Apple isn’t taking its typical 30 percent cut from these content transactions.
That 30 percent App Store fee is part of Spotify’s complaint against Apple in the European Union. “In recent years, Apple has introduced rules to the App Store that purposely limit choice and stifle innovation at the expense of the user experience — essentially acting as both a player and referee to deliberately disadvantage other app developers,” Spotify CEO Daniel Ek wrote in a 2019 blog post. At Wednesday’s hearing, Cook repeatedly pointed out that the rate lowers to 15 percent once customers enter their second year of a subscription, but that hasn’t done much to silence Apple’s critics.