Home / Apple / Michael Tsai – Blog – Apple temporarily stops taking 30 percent cuts in Facebook fees

Michael Tsai – Blog – Apple temporarily stops taking 30 percent cuts in Facebook fees



July Clover (also: James Vincent):

Apple has decided to temporarily waive the 30 percent cut it takes from in-app purchases for Facebook’s paid event feature in the app, reports CNBC. Facebook had accused Apple of harming small businesses by collecting fees from the new feature, which allows users to attend online classes and events via Facebook.

The policy update applies to ClassPass and Airbnb, two companies that also offer new digital experiences and classes in their apps.

A spokesman for Apple said that Apple reversed its decision on Facebook event fees due to the pandemic and a desire to give companies more time to adapt to digital business models.

The article does not make it clear, but I guess Apple means allowing external payment processing, not waiving the fees for transactions processed through the IAP system.

Steve Kovach:

Apple̵

7;s reversal comes weeks after it blocked an update to the Facebook app that warned users that a cut of paid event transactions would go to Apple. At the time, Facebook said that Apple would not make an exception to the rules to give the full amount of transactions to the companies hosting the events.

[…]

Apple’s spokesman said the decision did not affect gaming companies because gaming companies have not been harmed by the pandemic and have always been just digital.

It seems like a special cut for three large companies that complained loudly.

From the report from the House of Justice:

In response to the COVID-19 pandemic, some businesses moved physical events online, often by ordering through an app and holding the event through a video chat app. Teachers have also moved resources online, including through apps. The New York Times reported that Apple demanded 30% commission from these virtual classroom offerings. As a result, a company stopped offering virtual classes to iOS app users. The Times reported that Apple threatened Airbnb to remove its app from the App Store if Airbnb did not comply with Apple’s revenue share requirements.

In interviews with subcommittee staff, several app developers confirmed The New York Times’ reporting. Airbnb spoke with subcommittee staff and described conversations with the App Store team in which Apple said they had observed an increase in the number of apps offering virtual classes instead of personal classes due to the COVID-19 pandemic. As a result, Apple began bringing in the App Store to demand that app developers implement IAP, giving Apple the right to take 30% of in-app sales. Airbnb explained that Apple’s commission, plus compliance with Apple’s in-app pricing levels, would eventually lead to 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 would advertise the App Store to extract commissions from companies that have been forced to change the business model to survive the pandemic. Mr. Cook replied that Apple “would never take advantage” of the pandemic, but justified the behavior, explaining that the app developers now offer what Apple defined as a “digital service”, and Apple was entitled to commission.

Earlier:

App Store Business COVID-19 Facebook Purchasing iOS iOS 14 iOS App Tim Cook

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