News publishers call BS on Apple CEO’s antitrust testimony (video)

“Sir, we treat every developer the same. We have open and transparent rules.” — Tim Cook

From Bloomberg’s “Publishers Ask Apple CEO for Same App Store Deal Given to Amazon” posted Thursday:

A group of news publishers sent a letter to Apple Inc. Chief Executive Officer Tim Cook seeking similar deal terms in its App Store that Amazon.com Inc. gets for its video-streaming service.

Apple takes 30% of the revenue from most subscriptions in its App Store, then 15% after the first year. But in late July, a congressional antitrust panel disclosed internal emails showing a more-favorable deal struck between Apple services chief Eddy Cue and Amazon CEO Jeff Bezos. They agreed to a 15% revenue share for Amazon Prime Video customers who signed up through the iPhone app and no revenue share for users who already subscribed via Amazon or elsewhere, the emails showed.

“We would like to know what conditions our members — high quality digital content companies — would need to meet in order to qualify for the arrangement Amazon is receiving for its Amazon Prime Video app in the Apple App Store,” Jason Kint, CEO of Digital Content Next, wrote in the letter to Cook. Apple didn’t respond to a request for comment.

Digital Content Next represents several news outlets that rely on subscriptions for much of their revenue, including The New York Times, News Corp., which owns the Wall Street Journal, and the Washington Post. The group also represents Bloomberg LP, owner of Bloomberg News.

Cue the testimony:

My take: Apple is going to have to fix this.

12 Comments

  1. Jerry Doyle said:
    “…. It’s available to anyone meeting the conditions.” Tim Cook

    What are the conditions? The interview did not allow time for a discussion of those conditions. If those conditions are applied equally, in a “fair and equitable” manner to all developers meeting those conditions, then nothing needs fixing.

    2
    August 21, 2020
  2. Fred Stein said:
    Apparently the market has not read this news.

    1
    August 21, 2020
    • Jerry Doyle said:
      @Fred S: Brother Fred, I truly do not believe the market cares about this news. It really is not news.

      3
      August 21, 2020
  3. David Baraff said:
    Maybe the new future is AAPL oscillating between ridiculously over valued and reasonably priced.

    That would be a welcome change.

    2
    August 21, 2020
  4. Jerry Doyle said:
    CNBC news anchor Carl Quintanilla just interviewed Jason Kint, CEO of Digital Content Next, on this very subject on Squawk Alley. It is as I wrote above. Publishers are seeking information as to what is the special conditions between the two largest companies on the planet that allows a special deal with Amazon to see if they should get a special deal. The letter simply seeks information and the interview was “low-key.”

    I see nothing out of the ordinary here. Apple treats Developers in a “fair and equitable” manner.

    Every entity places conditions that fall within parameters of those participating. I’m a frequent flyer with a major airline. I get preferential treatment based on the status I hold with that airline. A Diamond status is going to get certain conditional treatment over a Platinum status, and a Platinum status over a Gold and a Gold over a Silver. All are treated in a “fair and equitable” manner relative to the conditions of their status.

    Little doubt that Amazon, due to its size, brings something to the table that many others do not bring and consequently Apple has certain conditions to accommodate entities that fall within certain status level.

    I do not see how this differs from other corporate tier policies as long as those arrangement treat participants in a “fair and equitable” manner. Tim was explicit in saying, “It’s available to anyone meeting the conditions.”

    3
    August 21, 2020
    • “Sir, we treat every developer the same. We have open and transparent rules.”

      As I read the facts of the case, both those statements are false.

      0
      August 21, 2020
  5. Fred Stein said:
    Yes, bro.

    And adding, Apple charges its 30% / 15% fees for the value of Apple’s user base, the customers that are in the store; And for all the tooling/support for developing the content and user experience. Amazon already has their customers under Prime; and does the vast majority of its development without the use of Apple’s tools.

    4
    August 21, 2020
  6. Kirk DeBernardi said:
    I think you’re all underestimating the long term pain of this soft-probe into this newly opened wound.

    When — not if — Apple (along with the usual suspects) gets dragged before Congress and regulators again, any exposure of preferential treatment will be Apple’s Achille’s Heal in this matter.

    Still might not affect the stock price though, just the shade of whiteness-purity of Apple’s honor.

    0
    August 21, 2020
  7. Gregg Thurman said:
    My take: Apple is going to have to fix this.

    If it ain’t broken, don’t fix it. There’s Nothing to fix here except the knowledge level of those reading the article.

    1
    August 21, 2020
  8. Bart Yee said:
    “We would like to know what conditions our members — high quality digital content companies — would need to meet in order to qualify for the arrangement Amazon is receiving for its Amazon Prime Video app in the Apple App Store,”

    1) When you have a video App for your video broadcast assets, like Amazon Prime Video.
    2) When you have existing customers who are using that App already or are subscribed to your digital distribution channels directly. Like Amazon Prime customers.
    3) When either individually or together (as in a consortium, association, or alliance) your potential revenues meet a threshold similar or proportional to Amazon’s. Now I know that’s a little unfair, but the bigger the business, the more you may get on negotiation. That’s leverage.

    Now OTOH, Apple could provide, maybe, other considerations for platform fees. Double edge sword if they give in, sets precedent, and then off to the races (to the bottom), or stick to their policies and risk external probing or public backlash. The important thing IMO is Apple creates and owns the platform from the software standpoint.

    1
    August 21, 2020

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