News publishers ask Apple for the same App Store deal it offered Amazon

KEY POINTS

• News industry body Digital Content Next has written to Apple asking how its members could qualify for a special deal like one given to Amazon in 2017.
• Under that arrangement, Apple offered Amazon a 15% fee on subscriptions for Amazon’s Prime Video app via the App Store, lower than a customary 30% fee.
• A growing list of companies are railing against Apple for allegedly anti-competitive rules in its App Store, the most recent being Fortnite maker Epic Games.

Apple CEO Tim Cook testifies before the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law on “Online Platforms and Market Power” in the Rayburn House office Building on Capitol Hill in Washington, DC on July 29, 2020.Mandel Ngan | AFP | Getty Images

Major news publishers have joined a growing number of companies criticizing Apple over its App Store policies, which they argue promote anti-competitive practices.

Digital Content Next (DCN), a trade body representing the likes of The New York Times, The Washington Post, News Corp and CNBC, wrote to the iPhone maker asking how its members could qualify for a special deal like one given to Amazon in 2017.

Under that arrangement, Apple offered Amazon a 15% fee on customer subscriptions for Amazon’s Prime Video app via the App Store, lower than Apple’s customary 30% fee for most in-app purchases.

“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,” DCN CEO Jason Kint said in a letter addressed to Apple CEO Tim Cook.

Apple declined to comment on DCN’s letter. The company has previously defended its treatment of Amazon, saying the firm is part of a program for “premium” video subscription services to offer integration with core Apple services, apps and features. It claims this program is only for individual purchases, not subscriptions.

Kint referred to a line of questioning from Rep. Hank Johnson, D-Ga. at last month’s congressional grilling of four top tech CEOs. At the House Antitrust Subcommittee, Johnson asked Cook if the agreement with Amazon was available to other app developers, to which Cook said: “It’s available to anyone meeting the conditions.”

“Nearly all of DCN’s members offer apps in the Apple App Store and, as noted above, many offer subscription-based access to a wide variety of content,” Kint said. “The terms of Apple’s unique marketplace greatly impact the ability to continue to invest in high-quality, trusted news and entertainment particularly in competition with other larger firms.”

In a separate blog post, DCN Senior Vice President of Government Affairs Chris Pedigo said that news organizations have increasingly turned to subscriptions as a source of revenue as advertising incomes have “cratered over the last decade.” News publishers have also been heavily impacted by the coronavirus pandemic due to a steep decline in ad spending.

“The monopolistic behavior of big tech puts a wide range of industries — not the least of which is the news industry — at a distinct disadvantage,” Pedigo said. “It is laudable that EU and American regulatory bodies are digging in and uncovering these anti-competitive behaviors. Talking trust is not enough. We need to level the playing field and transparency is a critical first step.”

The EU recently opened two antitrust investigations into Apple, one of which focuses on the App Store. Brussels has said it will assess whether Apple’s rules for app developers breach EU competition rules.

News organizations join an increasing list of companies railing against Apple for allegedly anti-competitive rules in its App Store. Last week, Epic Games brought a lawsuit against Apple and Google for booting its popular Fortnite game out of their respective software distribution platforms.

Fortnite was removed from the App Store and Android after it introduced a new way to buy in-game credits directly from Epic Games, effectively skirting Apple’s App Store and Google’s Play Store rules. Epic Games was particularly aggressive with its campaign against Apple, launching an ad that mocked Apple’s famous “1984” ad for its Macintosh computer.

App makers such as Epic Games have criticized Apple’s 30% cut of digital sales and approval process for apps. The App Store is the only means by which iPhone users can download their apps, unlike Google’s Android mobile operating system which allows the installation of alternative app stores.

Earlier this week, Apple became the first publicly-listed company in the U.S. to reach a $2 trillion market cap.

“Apple has put itself in a situation of trying to apply fair policy to an admittedly arbitrary set of rules,” Jacob Eiting, the CEO of in-app subscription platform RevenueCat, told CNBC last week. He added that every interaction with an iPhone “is an experience owned by Apple.”

Meanwhile, regulators are also piling pressure on online platforms to pay news outlets for the distribution of their content. Last month, Australia’s competition watchdog set out new rules that would require Google and Facebook to pay for news content in a world first. France’s competition regulator ruled that Google must pay publishers for reusing their content.