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US Media Fights Back Against Apple Tax

A news media trade organisation in the US is standing up to the so-called “Apple tax” with a request to renegotiate Apple’s high fees for App Store subscriptions.

Digital Content Next, which represents outlets such as the New York Times, the Washington Post, and other publishers, sent a letter to Apple CEO Tim Cook requesting clarification on how its members could avoid the current 30 per cent commission paid to Apple from first-time iOS app subscribers (which falls to 15 per cent after the first year of a subscription).

In the letter, DCN CEO Jason Kint cited a deal with Amazon for a flat 15 per cent commission on iOS subscribers to Amazon Video, which Apple CEO Tim Cook said in a US House Judiciary Committee hearing would be available to any developer that met the same 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. 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 keeping with your statement to the Committee, I ask that you clearly define the conditions that Amazon satisfied for its arrangement so that DCN’s member companies meeting those conditions can be offered the same agreement,” said Kint.

DCN’s SVP of government affairs, Chris Pedigo, condemned the deal – which also allows Amazon to offer alternative payment methods – in a blog post.

“Apple’s seemingly inviolate store terms – long questioned for favouring Apple’s own services and apps – may well bend for those who have sufficient power to wield in their negotiations.

“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. Some would point to this deal and say, ‘it’s the platforms’ world, we’re just living in it’. Frankly, the deal stinks of favoritism at best – and collusion at worst,” he said.

The move follows a lawsuit by Fortnite developer Epic Games to have its app reinstated to the App Store, after Apple removed it for providing an alternate subscription payment method that bypassed the “Apple tax”; enterprising hawkers are posting iPhones with the game installed for thousands of dollars on eBay. Apple has threatened to revoke Epic’s developer licence, which would have knock-on effects for other games that use its Unreal Engine.

Closer to home, Google is another big tech company coming under pressure from media over its business practices, and is fighting a draft ACCC code which would force it to pay for the use of Australian media organisations’ news content in its search results.

Analysis in The Australian has suggested that Google would have more to lose by walking away from the table than by paying up, as news organisations could form their own aggregation sites to break free of its advertising monopoly.

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