Apple CEO Tim Cook today testified to the U.S. House Judiciary Committee as part of an investigation into anti-competitive practices of big tech companies. According to some internal emails that were first revealed during the hearing, Apple considered increasing its App Store commission from 30% to 40%.
The email was sent by Apple’s senior vice president of Internet Software and Services Eddy Cue to other Apple executives in March 2011, three years after the launch of the App Store. Cue argues that Apple should increase company’s subscription fee to 40%.
For recurring subscriptions, we should ask 40% of the first year only but we need to work a few deals to see what is right. I think we may be leaving money on the table if we just asked for about 30% of the first year of sub.
Apple’s VP of Services also refers directly to apps such as MLB, NBA, and Hulu, which allow users to subscribe to their services through iOS apps. Since the very beginning of the App Store, Apple has taken 30% of any transaction made within its own system. This includes sold apps, in-app purchases, and subscriptions.
After some developers accused Apple of abusive and anti-competitive practices, the company reduced its commission to 15% when the user is paying for the subscription for more than one year. However, these emails show that the company has already considered the opposite way.
Documents from the Hearing on “Online Platforms and Market Power: Examining the Dominance of Amazon, Apple, Facebook and Google" pic.twitter.com/42o2Ye13jI
— House Judiciary Dems (@HouseJudiciary) July 29, 2020
During today’s hearing, Tim Cook explained that 84% of the apps available at the App Store don’t pay any fees to Apple. He also argued for Apple’s commission as a way to provide a great platform for developers with the App Store.
You can read a full overview of everything Tim Cook answered to the U.S. House Judiciary Committee here in our coverage.
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