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A surfaced email shows Apple striking a 2016 deal with Amazon, offering a 15% App Store fee instead of 30% so that the Prime Video app would launch on iPhones

Jul 31, 2020, 01:53 IST
Business Insider
Right: Amazon CEO Jeff Bezos. Left: Apple Senior Vice President Eddy Cue.Jason Bollenbacher/Getty Images for SXSW/MANDEL NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images/Business Insider
  • Documents published as part of an ongoing congressional antitrust investigation include an email exchange between Apple's Eddy Cue and Amazon CEO Jeff Bezos, who testified in Wednesday's hearing alongside his fellow tech execs.
  • The email shows how Apple agreed to charge 15% in subscriptions for the e-commerce giant instead of the usual 30% in order for the Prime Video app to launch on Apple's mobile phones.
  • Apple charges 30% from developers' subscriptions during their first year, but that drops to 15% after that time period, a point that Apple CEO Tim Cook repeatedly drove home during Wednesday's hearing.
  • Leading up to the hearing, Apple's App Store commissions were expected to be the main point of scrutiny for the smartphone maker as some developers have said Apple's rates have made it difficult to compete with the company.
  • CEO Tim Cook stated during the hearing Wednesday that Apple does not treat developers differently. "We treat every developer the same," he said.
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Newly revealed documents show how Apple negotiated a deal with Amazon to give the e-commerce firm an App Store discount in order for the Prime Video app to launch on Apple's iPhones.

The documents, as Bloomberg reported, show a November 2016 email exchange between Apple's senior vice president Eddy Cue and Amazon CEO Jeff Bezos. The exchange shows an agreement that Apple will receive a 15% revenue share from Amazon's Prime Video app subscriptions versus the 30% that it usually charges for everyone else.

The email was posted on Twitter by Bloomberg reporter Mark Gurman.

The document is among the many submitted to Congress from Facebook, Google, Apple, and Amazon as part of an ongoing antitrust investigation. They show the cutthroat business strategies employed by the Big Four to stave off competitors and grow into the tech titans we know them to be today.

During Wednesday's antitrust hearing, Cook stated that the company does not give special treatment to developers.

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"We treat every developer the same," he said. He also reiterated several times during the hearing that Apple's subscription charge lowers to 15% after the first year.

In the weeks leading up to the hearing, Apple commissioned researchers to prove that the company's App Store rates were comparable to others found in the digital market.

Other documents published reveal that Cue also once mused upping the subscription app for all developers to 40% for the first year. An Apple exec named Jai Chulani also wrote in an email exchange with Cue and others that Apple "may be leaving money on the table" by only asking for 30% in subscriptions for the first year.

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