Facebook says 30% ‘Apple tax’ burdens small businesses

Facebook has joined the growing list of companies and developers that have taken a stand against the 30% commission fee that Apple collects on payments made through the app store. The social media giant says Apple is refusing to waive its standard App Store commissions rate and is not allowing Facebook to use its own in-app payment processing system which would help event organizers to keep more of the money they earn on the platform.

Apple’s App Store is a half a trillion dollars digital ecosystem which charges 30% revenues share from in-app purchases from various apps (the percentage of the cut varies from app to app). Although wanting to have their apps on the ecosystem, some developers are protesting against the percentage of the revenue share, like Spotify, Epic, and others.

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Facebook Speaks Out Against Apple

The new paid online events feature on Facebook is designed for page owners to create and host online events, set a price, and get paid for them. The goal of this feature is to help small businesses to earn money following the calamitous economic effects of COVID-19.

Fidji Simo, the head of Facebook’s mobile app, in a blog post.

“We asked Apple to reduce its 30% App Store tax or allow us to offer Facebook Pay so we could absorb all costs for businesses struggling during COVID-19. Unfortunately, they dismissed both our requests and [small businesses] will only be paid 70% of their hard-earned revenue.”

Facebook

Simo went on to say that the tech giant will not be collecting any fees from paid online events for the next year. “For transactions on the web, and on Android in countries where we have rolled out Facebook Pay, small businesses will keep 100% of the revenue they generate from paid online events.” Simo further explained on Friday that this policy would remain in effect while communities remain closed due to the pandemic.

This feature is controversial because on iOS devices it says “Apple takes 30% of this purchase.” Simo justified the disclaimers in a press call as,

“When people are paying $20 for a paid online event and they assume that the $20 is all going to the local business they’re trying to support — when 30% is going to an almost $2 trillion company, that’s relevant information for people to have,”  “We felt this was an important thing to call out.”

The company has sent this to Apple for review, but Simo said Facebook is unsure if this label will get through Apple’s review process.

Facebook

Recently, the social media giant finally released its gaming app for iOS but without gameplay functionality to get approval for the App Store. Consequently, the iOS version of the app only features game streams and social functions.

Facebook’s Chief Operating Officer, Sheryl Sandberg said

“Unfortunately, we had to remove gameplay functionality entirely in order to get Apple’s approval on the standalone Facebook Gaming app — meaning iOS users have an inferior experience to those using Android.”

Facebook Gaming

Currently, Apple is facing several allegations of anti-competitive behavior, and the tech giant is also under a formal antitrust investigation by the EU for its App Store and Apple Pay practices. Apple has categorically denied all accusations and continues to implement the App Store policy strictly. This week Epic Games released an update for Fortnite which introduced a direct pay method to cut Apple completely from in-app revenue. This rebelliousness resulted it Fortnite block on the App Store.

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About the Author

Mobile gaming editor for iThinkDifferent