Apple demands a 30% cut from boosts and promoted posts

Apple demands a 30% cut from boosts and promoted posts
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Monopoly is a fun board game that you can play where you try to exclude your competitors.

Monopoly is a fun board game that you can play where you try to exclude your competitors.
Photo: light field studies (Shutterstock)

Apple released an update to its payment guidelines on Monday, requiring apps to use the company’s in-app purchase tool for “boosts” and promoted posts, meaning Apple will keep 30% of sales. . The move appears to be yet another policy aimed directly at Meta (formerly known as Facebook).

A variety of apps allow users to promote their content for a small fee. Do you want more people to see your tweets, your dating profile, or that old video game you’re trying to sell? Twitter, Tinder, and eBay will sell you a “boost” to get you higher in the feed. For years, that seemed to fall into a gray area in App Store policies. Apps that sell “virtual goods” it is assumed to use the iPhone’s in-app payment system, which comes with a hefty service charge. That has been true for a long time. But that policy didn’t always apply when it came to raises, and certain apps, like Facebook, got away with accepting payments directly and avoiding Apple’s massive fee.

Some apps, including Twitter and Tinder, already use the in-app payment tool for promotions and promoted posts, but Facebook doesn’t. Apple is likely to make a nice change when it starts enforcing this policy more harshly, though Meta may challenge the change. The social media giant is already engaged in a public fight with Apple over the latter’s recent policy changes, and changing in-app payment requirements will likely add fuel to the fire. Another iPhone policy change last year cost Meta billions of dollars in lost ad revenue, which Apple is now working to gobble up through a series of new advertising projects.

“Apple continues to evolve its policies to grow its own business while undermining others in the digital economy,” Meta spokesman Tom Channick reportedly said in a comment to Apple. the edge. “Apple previously said it didn’t take a share of ad revenue from developers, and now it’s apparently changed its mind. We remain committed to offering small businesses easy ways to post ads and grow their business on our apps.”

Apple initially declined to comment, but after this article was published and started to gain traction, the company reached out again to share its thoughts. “For many years, App Store guidelines have made it clear that the sale of digital goods and services within an app must use in-app purchase,” the Apple spokesperson said. Peter Ajemian, in an email. “Boosting, which allows a person or organization to pay to increase the reach of a post or profile, is a digital service, so an in-app purchase is of course required.”

This new update is aimed at advertising that increases the visibility of social media posts, but there is an exception for more traditional ad types, so Meta’s larger business model is not affected by this move. Politics is an example of Apple’s market power. They control the App Store, and that’s the only official way to get your app onto iPhones. Basically, Apple can charge developers whatever they want, as long as they can get away with it. In some places, you can’t get away with it: South Korean law enforcement raided Apple’s headquarters after persistent complaints from iOS developers about overcharging. Meta did not respond to a request for comment.

The boost policy update is part of a broader effort to crack down on apps, forcing developers to kiss Apple’s ring and use the in-app payment system or risk being banned. of the market.

Regulators in other countries, where competition rules are much stricter, have forced Apple to allow apps to use other payment systems that don’t take as much of the revenue. Google has faced scrutiny for similar policies on its Play Store and was even fined $113 million this week for not allowing third-party payments. Last year, Epic Games won a Major lawsuit against Apple After Fortnite was banned from the app store for offering third party payment options. A judge ruled that Apple can’t stop app developers from linking to other payment systems.

Apple says that it is taking this money only to protect you. The company reviews apps for security, privacy, and fraud issues, including oversight of payment systems. CEO Tim Cook has argued that it is expensive to maintain and that a 30% cut is a reasonable fee because the money is needed to protect consumers, which also benefits developers, because it creates a trustworthy market.

Apple invented the App Store. Advocates (and Tim Cook) argue that the company should be able to charge whatever it wants. But looking at it another way, the App Store is not a single, regular service, but rather the portal to all other iPhone apps. Critics say that 30% is way more than Apple needs to pay for app review, and what’s really going on here is a monopoly charging protection money to anyone who wants to walk through the gates of Cupertino.

Update: 10/26/2022 9:40 ET: This story has been updated with a comment from Meta.

Update: 10/26/2022 1:55 ET: This story has been updated with a comment from Apple.

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