According to documents released as part of the ongoing Epic v. Apple hearings, Phil Schiller, the Apple executive in charge of the App Store, suggested cutting the tech giant’s 30 percent App Store commission to 25 or 20 percent back in 2011.
Schiller floated the idea to Apple CEO Steve Jobs and the company’s head of services, Eddy Cue. The email, first reported by Bloomberg, was released as part of Apple’s legal battle with Epic Games.
The App Store head starts the email with, “Do we think our 70/30 split will last forever?,” before saying that “I think someday we will see enough challenge from another platform or web based solutions to want to adjust our model.” Schiller says that Apple should change its fee structure “from a position of strength rather than weakness” and says that the company could change its commission rate once Apple starts generating over $1 billion in annual profit.
The email was released as part of Epic’s legal battle with Apple.
The email also includes a link to a 2011 The Wall Street Journal article that outlines how developers could use web apps to bypass Apple’s App Store fee.
Along with the tech giant’s tight control over its App Store, the 30 percent commission Apple takes from in-app purchases is a focal point of Epic’s legal battle with the company. Given Epic is required to use Apple’s payment system for in-app purchased within Fortnite, resulting in a 30 percent commission for the latter company, Epic argues that the App Store being tied to the iPhone and iPad makes it a monopoly.
In response to Epic’s criticism, Apple dropped its commission to 15 percent for developers that make under $1 million in sales through its store.
The Epic v. Apple trial began on May 3rd and is expected to run for three weeks.
Image credit: Epic Games
Source: Bloomberg
