Amazon Offers Prime Video Purchases On iOS As Apple Foregoes 30% Third-Party Tax

Amazon.com Inc. AMZN is offering purchase and rent options in its Prime Video apps on certain Apple Inc. AAPL platforms starting Wednesday.

What Happened

The change for iOS and TV devices comes as Apple has foregone the requirement of giving it a 30% cut of the revenue, according to Bloomberg.

"Apple has an established program for premium subscription video entertainment providers to offer a variety of customer benefits — including integration with the Apple TV app, AirPlay 2 support, tvOS apps, universal search, Siri support and, where applicable, single or zero sign-on," Apple told Bloomberg in a statement.

The Cupertino-based company said that the changes also apply to other apps including Altice USA Inc.'s ATUS Altice One and Vivendi SA's VIVHY Canal+, and their users will have the "option to buy or rent movies and TV shows using the payment method tied to their existing video subscription."

Why It Matters

Apple's policy of imposing a 30% revenue cut on third-party apps has often been a point of contention with other companies, who have referred to it as a "tax."

Spotify Technology SA SPOT last year filed an antitrust complaint against Apple for the revenue cut.

The music streaming company's CEO Daniel Ek said that the policy killed competitors as they had to price their products and services at a higher price than Apple's due to the extra 30% in costs.

Price Action

Amazon's stock closed 2.16% lower at $1,908.7 per share on Wednesday and traded slightly higher in the after-hours session at $1,909.

Apple's shares closed 5.26% lower at $240.91 and traded 0.8% higher at $242.84 in the after-hours.