The company behind the hugely popular game Fortnite is suing Google and Apple after being removed from their app stores.
“Fortnite” publisher Epic Games may have kick-started a new game: Make a Better Deal with Apple.
The New York Times, The Washington Post, The Wall Street Journal and USA TODAY parent company Gannett – all members of the media group Digital Content Next – are asking for just that from Apple CEO Tim Cook.
In a letter to Cook dated Thursday, Digital Content Next asks whether the media group meets conditions similar to Amazon, which shares 15% of revenue from its Amazon Prime Video apps on iOS and Apple TV with Apple.
Typically, Apple gets 30% of revenue from in-app sales on iOS devices and 15% after a subscriber’s first year. During a July 29 House Judiciary subcommittee hearing, Cook said that a deal similar to Amazon’s is “available to anyone meeting the conditions.”
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Digital Content Next CEO Jason Kint asks in the letter to Cook “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.”
Apple has not yet responded to a request from USA TODAY.
Many Digital Content Next group members – a roster that also includes the Associated Press, Disney, Fox and NPR – sell subscriptions through the App store, he says. “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,” Kint said.
The appeal, which could also affect revenue sharing from Apple News subscriptions, comes as the iPhone maker is fending off another challenge to its revenue sharing structure.
Last week, Epic Games gave mobile “Fortnite” players a new, discounted way to pay for in-game content that sidestepped the Apple App store and Google Play store payment methods – and eliminated those tech giants’ cut of the revenue.
That led to Apple and Google pulling the mobile game from their stores. Subsequently, Epic Games sued both companies describing each one’s app store as anti-competitive and monopolistic.
Also last week, Facebook criticized Apple for not reducing its “30% App Store tax” as part of a plan to allow small businesses to earn money hosting online events on Facebook.
Apple said, in a statement about Epic’s action, that the game publisher “agreed to the App Store terms and guidelines freely and we’re glad they’ve built such a successful business on the App Store. … The fact that their business interests now lead them to push for a special arrangement does not change the fact that these guidelines create a level playing field for all developers and make the store safe for all users.”
But Apple’s arrangement with Amazon “is devastating to Apple in the Epic suit,” said Michael Pachter, an analyst with Wedbush Securities. “If Apple does, in fact, give anyone meeting a similar fact pattern the same deal, it’s even worse for them, because it shows selective enforcement of their TOS (terms of service) and a willingness to modify on a case-by-case basis.”
Apple can expect a long line of publishers and developers coming to their door with hands out, he says. “I think you’re going to see subscription services seek similar terms, and I think it’s going to be problematic,” Pachter said.
All this activity comes as Apple became the first U.S. company to top $2 trillion in market value. And congressional interest in antitrust and anti-competitive behavior by big tech remains an issue that won’t likely fade.
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The Apple-Amazon deal should get more attention, says Chris Pedigo, Digital Content Next’s senior vice president for government affairs, in a blog post, out Thursday. “Neither Apple nor Amazon have ever publicly disclosed the deal. Given that they are the two most valuable companies on the planet, and the huge number of businesses that rely on these platforms, it is remarkable that such a deal has been shrouded in secrecy for so long,” he said.
“Some would point to this deal and say, ‘It’s the platforms’ world, we’re just living in it’,” he said. “Frankly, the deal stinks of favoritism at best – and collusion at worst.”
Follow Mike Snider on Twitter: @MikeSnider.
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