Apple Will Temporarily Stop Taking a 30 Percent Cut on Facebook Event Fees
Juli Clover (also: James Vincent):
Apple has decided to temporarily waive the 30 percent cut that it takes from in-app purchases for Facebook’s in-app paid event feature, reports CNBC. Facebook had accused Apple of hurting small businesses by collecting fees from the new feature, which lets users attend online classes and events through Facebook.
The policy update will pertain to ClassPass and Airbnb, two companies that are also offering new digital experiences and classes within their apps.
An Apple spokesperson said that Apple reversed its decision on the Facebook event fees due to the pandemic and a desire to give companies more time to adapt to digital business models.
The article doesn’t make it clear, but I assume that Apple means allowing external payment processing, not waiving the fees for transactions processed through the IAP system.
Apple’s reversal comes weeks after it blocked an update to the Facebook app that displayed a warning to users that a cut of transactions for paid events would go to Apple. At the time, Facebook said Apple would not make an exception to its rules to give the full amount of the transactions to the businesses hosting the events.
[…]
The Apple spokesperson said the decision does not affect gaming companies because gaming businesses have not been hurt by the pandemic and have always been digital-only.
It seems like a special carve-out for three big companies who complained loudly.
From the House Judiciary Committee report:
In response to the COVID-19 pandemic, some businesses moved physical events online, often booking through an app and holding the event through a video chat application. Educators have also shifted resources online, including through apps. The New York Times reported that Apple demanded a 30% commission from these virtual class offerings. As a result, one company stopped offering virtual classes to users of its iOS app. The Times reported that Apple threatened Airbnb that it would remove its app from the App Store if Airbnb did not comply with Apple’s demand for a share of its revenues.
In interviews with Subcommittee staff, multiple app developers confirmed the The New York Times’ reporting. Airbnb spoke with Subcommittee staff and described conversations with the App Store team in which Apple said it had observed an uptick in the number of apps offering virtual classes in lieu of in-person classes due to the COVID-19 pandemic. As a result, Apple began canvassing the App Store to require app developers implement IAP, entitling Apple to take 30% of in-app sales. Airbnb explained that Apple’s commission, plus compliance with Apple’s pricing tiers for in-app purchases would ultimately result in a 50-60% price increase for consumers.
[…]
At the Subcommittee’s hearing on July 29, 2020, Chairman Jerrold Nadler (D-NY) asked Mr. Cook about the allegations that Apple was canvassing the App Store to extract commissions from businesses that have been forced to change their business model in order to survive during the pandemic. Mr. Cook responded that Apple “would never take advantage” of the pandemic, but justified the conduct, explaining that the app developers were now offering what Apple defined as a “digital service” and Apple was entitled to commissions.
Previously:
- House Report on Competition in Digital Markets
- New Apple Store Guidelines for Outside Payments
- Facebook Rejected for Mentioning App Store Fee
- Facebook Events vs. the App Store
- Tim Cook’s App Store Testimony
Update (2021-04-22): José Adorno:
Apple has updated its Developer’s page to again waive the App Store requirement for paid online group services to use App Store in-app purchases for payments. This comes as the COVID-19 pandemic continues to cause businesses to pivot to digital services rather than in-person.
3 Comments RSS · Twitter
I have been using Apple for nearly 20 years now, and following them for a bit longer than that. Not very long compared to true old timer, but I dont remember a single instance I disagree with Apple so intensely as this one. That they are *entitle* to 30% of nearly all digital transition from their App Store. From Digital Class, Education, to all sort. ( Some with specific exemption ). This is so clearly wrong to me.
My biggest problem isn't so much with the 30% per se. My problem is they provide very little value.
Apple's iOS market is sadly a microcosm of the worst perversion of a capitalist marketplace -- regular folks get reamed with fees and roadblocks, while billionaires pay nothing and get special treatment.
Why are they allowing this dangerous practice to continue?
How can the app store keep me safe if service providers are allowed to use their own payment systems?
This sounds like some kind of scary 'flea market'
“At the heart of the Epic complaint is they’d like developers to each put in their own payment information. But that would make the App Store a flea market and you know the confidence level you have at the flea market. The volume of people going into such a market would be dramatically lower, which would be bad for the user, because they would miss out on the innovation like we just heard with the four developers. And the developers would be left out because they wouldn't have a huge audience to sell to. So nobody wins in that environment.” - Tim Apple
