Big tech antitrust hearing: Apple halved App Store fee to get Amazon Prime Video on iPhone, Apple TV

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Updated: Jul 30, 2020 1:03 PM

Apple’s CEO Tim Cook said that the assertion was not correct and that Apple treated every developer in the same manner.

Apple’s CEO Tim Cook had in 2017 announced that Amazon Prime Video will be debuting on Apple TV set-top box after a prolonged period of hiatus.

An email released by the US Congress’ Antitrust subcommittee has opened up some startling revelations about the mode of working of the four biggest technology companies, namely Facebook, Amazon, Apple, and Google that dominate the world of technology and online communication. The email has established a direct and confidential arrangement between a senior vice president of Apple, Eddy Cue, and Jeff Bezos, Amazon’s founder, and CEO for placing Amazon Prime Video on Apple’s mobiles and set-top boxes that the Antitrust subcommittee has alleged a preferential treatment by Apple for Amazon.

The email has shown some light on the extent to which Apple agreed to give in to secure Amazon Prime Video on its platform as the company, back in 2016, decided to reduce the app store fee by 50 per cent in a bid to lure the Jeff Bezos-founded company to make its video streaming app available on Apple’s platforms.

Apple earns 30 per cent of the subscription cost earned by the company through its app but as per the deal, Apple offered to reduce it to only 15 per cent after the first year of subscription. Additionally, the companies agreed on a 15 per cent revenue-sharing deal for the users who will subscribe to Amazon Prime Video through the Apple App Store and no revenue sharing in case of direct subscription by users via Amazon. Also, Eddy Cue extended the offer of taking only 15 per cent of the subscription revenue if Amazon could onboard its sell services like Showtime on Apple’s platforms.

Notably, Apple’s CEO Tim Cook had in 2017 announced that Amazon Prime Video will be debuting on Apple TV set-top box after a prolonged period of hiatus. The deal between the two leading companies provided Amazon’s video service with an opportunity to integrate with Apple’s digital assistant service, Siri, and Apple’s TV app.

The Antitrust subcommittee of the US Congress recognised this deal and revenue sharing arrangement as a preferential treatment given to Amazon and that the Steve Jobs-founded company was not treating its developers equally on the issue of providing access to its app store and other platforms. Apple’s CEO Tim Cook denied the allegations and said that the assertion is not correct and that Apple treats every developer in the same manner.

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