New information obtained in connection with Epic Games’ lawsuit against Apple shows that Apple’s top manager of the App Store, Phil Schiller, in 2011 considered whether the company’s fee should be reduced for purchases related to the App Store, reports Bloomberg.
In an email sent in July 2011 to Eddy Cues, head of service at Apple, Phil Schiller, who was previously head of marketing, asks if the current 70/30 distribution will last forever. Phil Schiller should also say that he strongly supports the fee but added that he does not think it can apply forever. Should it be changed, he suggests that it should be done from a “position of strength” for Apple. Like when the App Store reaches over a billion dollars in profit. The fee could be reduced to 25 or 20 percent if profitability still reached over one billion dollars.
“I know this is controversial. I just see it as another way to look at the size of the business, what we want to achieve and how we stay competitive,” Phil Schiller wrote in the email.
Apple currently takes 30 percent of revenue from the purchase of paid apps and in-app purchases for developers that generate over a million dollars a year. For developers who do not reach that level, the fee is 15 percent. Epic Games argues that the fee is anti-competitive and that Apple has a monopoly through the App Store.
Apple commented on Phil Schiller’s email from 2011 saying that he did not say about the App Store a billion dollars in profit and that there was no indication that the fee structure is linked to the profit produced by the App Store.
According to calculations made by one of Epic Games’ expert witnesses, the App Store generated a commission of 22 billion dollars and has a profit margin of 80 percent.