The New York Times Company said on Monday that it has ended its partnership with Apple News.
The move was outlined in the paper on Monday. NYTimes articles will no longer be seen alongside other publications that appear in the Apple News curated feed.
The NYTimes (NYT) - Get Report is prioritizing adding new subscribers, and said the Apple partnership did not give it enough of a direct relationship with subscribers to justify continuing. Apple (AAPL) - Get Report shares closed 2.3% higher on Monday at $361.78.
“Core to a healthy model between The Times and the platforms is a direct path for sending those readers back into our environments, where we control the presentation of our report, the relationships with our readers and the nature of our business rules,” said Meredith Kopit Levien, COO of NYTimes, wrote in a memo to employees. “Our relationship with Apple News does not fit within these parameters.”
The paper is one of the first to pull out of an Apple News deal.
Apple News has about 125 million monthly readers, and Apple takes a 30% cut of any subscriptions sold through the app. Apple also offers an advertising revenue share, but that generates little extra income for publishers, the NYTimes reported.
Last year Apple also launched Apple News+, a premium news service that bundles access to a range of publishers, including the Wall Street Journal, Conde Nast and Vanity Fair, in a single $10 per month subscription. The NYTimes passed on that program, which gives a 50% cut to Apple with the rest split among participating publishers.
Apple's cut of transactions in the App Store, and proprietary apps such as Apple News, have come under scrutiny in recent weeks.
Developers have long complained that the fees are excessive, and various courts and regulators are in the process of evaluating whether Apple's fees and terms amount to monopolistic conduct.
Earlier this month, the European Union announced two separate investigations of Apple's terms, conditions and other measures relating to the App Store and Apple Pay.
“Apple sets the rules for the distribution of apps to users of iPhones and iPads,” said the EU's competition commissioner Margrethe Vestager in a statement. “It appears that Apple obtained a 'gatekeeper' role when it comes to the distribution of apps and content to users of Apple’s popular devices.”
In the U.S., Rep. David Cicilline (D-RI), chair of the House of Representatives' antitrust committee, likened Apple's fees to "bullying" and "highway robbery."
Shares of Apple rose $8.15, or 2.3%, to $361.78 Monday. Shares of The New York Times Co. gained 38 cents, or 0.9%, to $42.17.
Apple shares are up 21% year to date.
Shares of the New York Times Co. are up 31% so far this year.