Apple Discussed 'Punitive Measures' Against Netflix for Dropping In-App Purchases

As the Epic Games v. Apple trial progresses into its third day, Apple's internal documents and communications with various companies are continuing to surface, giving us some insight into the dealings that Apple has had around the App Store.

netflix sign up
Back in December 2018, Netflix stopped offering in-app subscription options for new or resubscribing members and instead began requiring them to sign up for Netflix outside of the ‌App Store‌ in order to avoid paying Apple's 30 percent cut. As it turns out, Apple executives were unhappy with Netflix's decision, and made attempts to persuade Netflix to keep in-app purchases available.

The subject hasn't yet been broached in the live in-person trial that's going on right now, but 9to5Mac highlighted emails between Apple executives discussing Netflix's decision. When Apple learned that Netflix was A/B testing the removal of in-app purchases in certain countries, Apple started scrambling to put a stop to it.

Apple's ‌App Store‌ Business Management Director Carson Oliver sent out an email in February 2018 outlining Netflix's testing plans and asked his fellow ‌App Store‌ executives whether Apple should take "punitive measures" against Netflix.

Do we want to take any punitive measures in response to the test (for examples, pulling all global featuring during the test period)? If so, how should those punitive measures be communicated to Netflix? (sic)

The emails do not make it clear if Apple did indeed take any steps to limit featuring during Netflix's testing, but Netflix did proceed with the A/B test and found it fruitful. Ahead of when Netflix pulled in-app purchase options, Apple designed an entire presentation to persuade Netflix to continue to offer in-app subscription sign ups.

Netflix was concerned about voluntary churn levels on iOS because it was higher than those who signed up via the web. In a nutshell, iOS users who subscribed to Netflix through in-app purchases were cancelling their Netflix accounts at a greater rate, an issue that Apple worked to solve for Netflix.

Other Netflix concerns included free trial abuse (which Apple addressed), un-grandfathering (raising prices on users locked in to a select price), and offering promotions (wasn't possible to offer discounts on iOS). Apple internally discussed ways to fix these problems for Netflix to encourage the company to stick with in-app purchases.

Apple also incentivized Netflix by describing how much dedicated featuring Netflix was getting. Apple said that Netflix was featured more than any other partner, something that Apple was willing to continue doing.

Apple proposed continued coordinated featuring across iOS and Apple TV, ads promoting Netflix, ‌App Store‌ email campaigns, featuring performance data, an "‌Apple TV‌ bundle" and select video partner program benefits such as the option to up-sell non-IAP customers and billing flexibility to un-grandfather and cancel subscription charges.

Apple also discussed bundle offers for Netflix and an Apple service along with carrier and payment partners for co-funded subscription offers, as well as in-store marketing for Netflix, but none of these measures ultimately convinced Netflix to stick with in-app purchases.

Today, there is no in-app purchase option for Netflix, and those who want to watch Netflix on an iPhone or an iPad must first sign up on the web, with Apple collecting no money. Netflix is also not allowed to direct customers where to sign up, though, and the splash screen just says "You can't sign up for Netflix in the app."

The ‌Epic Games‌ v. Apple trial is expected to last for approximately three weeks in total, with Apple CEO Tim Cook and other executives set to testify in the coming weeks.

Popular Stories

iphone 16 pro ghost hand

5 Reasons to Skip This Year's iPhone 17 Pro

Thursday July 10, 2025 4:54 am PDT by
Apple will launch its new iPhone 17 series in two months, and the iPhone 17 Pro models are expected to get a new design for the rear casing and the camera area. But more significant changes to the lineup are not expected until next year, when the iPhone 18 models arrive. If you're thinking of trading in your iPhone for this year's latest, consider the following features rumored to be coming...
apple wallet drivers license feature iPhone 15 pro

Apple Says iPhone Driver's Licenses Will Expand to These 8 U.S. States

Tuesday July 8, 2025 11:26 am PDT by
In select U.S. states, residents can add their driver's license or state ID to the Wallet app on the iPhone and Apple Watch, providing a convenient and contactless way to display proof of identity or age at select airports and businesses, and in select apps. Unfortunately, this feature continues to roll out very slowly since it was announced in 2021, with only nine U.S. states, Puerto Rico,...
macbook pro blue green

M5 MacBook Pro No Longer Coming in 2025

Thursday July 10, 2025 12:38 pm PDT by
Apple does not plan to refresh any Macs with updated M5 chips in 2025, according to Bloomberg's Mark Gurman. Updated MacBook Air and MacBook Pro models are now planned for the first half of 2026. Gurman previously said that Apple would debut the M5 MacBook Pro models in late 2025, but his newest report suggests that Apple is "considering" pushing them back to 2026. Apple is now said to be...
iPhone 17 Pro in Hand Feature Lowgo

Leaker Reveals Amount of RAM in iPhone 17 Through iPhone 17 Pro Max

Wednesday July 9, 2025 8:08 am PDT by
Three out of four iPhone 17 models will feature more RAM than the equivalent iPhone 16 models, according to a new leak that aligns with previous rumors. The all-new iPhone 17 Air, the iPhone 17 Pro, and the iPhone 17 Pro Max will each be equipped with 12GB of RAM, according to Fixed Focus Digital, an account with more than two million followers on Chinese social media platform Weibo. The...
iPhone 17 Pro in Hand Feature Lowgo

iPhone 17 Pro to Reverse iPhone X Design Decision

Monday July 7, 2025 9:46 am PDT by
Since the iPhone X in 2017, all of Apple's highest-end iPhone models have featured either stainless steel or titanium frames, but it has now been rumored that this design decision will be coming to an end with the iPhone 17 Pro models later this year. In a post on Chinese social media platform Weibo today, the account Instant Digital said that the iPhone 17 Pro models will have an aluminum...
Foldable iPhone 2023 Feature 1

Foldable iPhone Display Production Begins Ahead of Launch Next Year

Wednesday July 9, 2025 10:59 pm PDT by
Production of foldable OLED displays for Apple's first foldable iPhone have begun ahead of its expected launch next year, Korea's ETNews reports. The first foldable iPhone's displays are being produced by Samsung Display, who are establishing a production line dedicated to the upcoming Apple device its A3 factory in Asan, Chungcheongnam-do. The production line will make displays exclusively...
apple tv 4k new orange

New Apple TV Expected Later This Year With These New Features

Saturday July 12, 2025 3:09 pm PDT by
A new Apple TV is expected to be released later this year, and a handful of new features and changes have been rumored for the device. Below, we recap what to expect from the next Apple TV, according to rumors. Rumors Faster Wi-Fi Support The next Apple TV will be equipped with Apple's own combined Wi-Fi and Bluetooth chip, according to Bloomberg's Mark Gurman. He said the chip supports ...
iphone 16 pro pro max

iPhone 17 Pro Models With BOE Displays Will Be Sold in China Only

Thursday July 10, 2025 11:59 pm PDT by
iPhone 17 Pro and iPhone 17 Pro Max models with displays made by BOE will be sold exclusively in China, according to a new report. Last week, it emerged that Chinese display manufacturer BOE was aggressively ramping up its OLED production capacity for future iPhone models as part of a plan to recapture a major role in Apple's supply chain. Now, tech news aggregator Jukan Choi reports...

Top Rated Comments

threesixty360 Avatar
55 months ago
I dont see anything here. A business manager asked a question about what the company should do. Thats not "apple" doing anything here.

Then they discussed working with Netflix to improve the experience etc.. Again what is the deal here? Apple works with companies that add significant benefit to their products.. is that news?

Finally, Netflix seem to have decided that the churn rate for sign ups via the app were even more of a problem than the 30% cut ( which would drop to a lot lower after 1yr right?).

What am I missing here?
Score: 54 Votes (Like | Disagree)
mihirdelirious Avatar
55 months ago
"We do not retaliate or bully people. It’s strongly against our company culture.” - Tim Cook.
So that was a lie under oath.
Score: 51 Votes (Like | Disagree)
gnasher729 Avatar
55 months ago

"We do not retaliate or bully people. It’s strongly against our company culture.” - Tim Cook.
So that was a lie under oath.
There was a discussion. There was no retaliation or bullying.
Score: 41 Votes (Like | Disagree)
dba415 Avatar
55 months ago
Apple is the greediest company in the world. They take extracting money out of others to ridiculous levels in every product they sell.
Score: 32 Votes (Like | Disagree)
drumpat01 Avatar
55 months ago
The biggest issue I've always had with Apple's in-app purchasing is that you can't even LINK to your own website to sign up. That is not OK! Yes, people know what Netflix is and can get to Netflix a million ways...but what about everyone else? What about some other small app maker that isn't already a household name? So they can list their website for support but not list it in the app itself when registering? That's terrible and anti-competitive.
Score: 32 Votes (Like | Disagree)
goobot Avatar
55 months ago
This is a good example of Apple almost going too far.
Score: 29 Votes (Like | Disagree)