As Epic Games’ lawsuit against Apple rumbles on, new information has emerged showing that in 2011, App Store manager and former head of marketing Phil Schiller considered whether Apple cut should cut its fee.
Bloomberg reports that in an email sent in July 2011 to services boss Eddy Cue, Schiller asked if “we think our 70/30 split will last forever”. He went on to say that he strongly supported the fee, but added that he did not think it would apply forever.
If it were to be changed, he proposed that it should be done from a “position of strength” for Apple, such as when the App Store reached $1bn in profit. From that point onwards the fee could be reduced to 25% or 20%, Schiller suggested – provided profits remained above the $1bn mark.
“I know that this is controversial,” Phil Schiller wrote in the email. “I just tee it up as another way to look at the size of the business, what we want to achieve, and how we stay competitive.”
Apple currently takes 30% of revenue from the purchase of paid apps and in-app purchases for developers that generate more than $1m a year. Following a change to the fee structure last year, smaller developers that do not reach the $1m mark are charged only 15%.
Epic Games has argued that the fees are anticompetitive, and that Apple exercises monopoly powers through its ownership and running of the App Store. Apple, unsurprisingly,
Apple has responded to the revelations by commenting that Schiller did not say whether the App Store made profits of $1bn, and that there is no indication that the fee structure is linked to the profit produced by the App Store.
According to calculations made by one of Epic’s expert witnesses, the App Store generated $22bn in commissions for Apple last year, and has a profit margin of 80%.
This article originally appeared on
Macworld Sweden. Translation by David Price.