Apple demands 30% reduction in boosts and promoted posts

Monopoly is a fun board game you can play where you try to outrun your competition.

Monopoly is a fun board game you can play where you try to outrun your competition.
Photo: LightField Studios (Shutterstock)

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

A variety of apps allow users to promote their content for a small fee. 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 it higher in the feed. For years, this seemed to fall into a gray area in App Store policies. Apps that sell “virtual goods” are supposed to to use the iPhone’s built-in payment system, which comes with significant service fees. It’s been true for a long time. But that policy hasn’t always been enforced when it comes to boosts, and some apps, like Facebook, have gotten away with accepting payments directly and avoiding Apple’s huge fees. Apple declined to comment.

Some apps, including Twitter and Tinder, already use the built-in payment tool for boosts and promoted posts, but Facebook doesn’t. Apple would likely make a good chunk of the change when it starts enforcing this policy more strictly, though Meta may dispute the change. The social media giant is already embroiled in a public tussle 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 advertising revenue, which Apple is now working to gobble up through a number of new advertising projects.

“Apple continues to evolve its policies to grow its own business while undermining others in the digital economy,” Meta said. spokesperson Tom Channick would have said in a comment to Jhe borders. Apple has previously said it doesn’t take a share of ad revenue from developers and has now apparently changed its mind. We remain committed to providing easy ways for small businesses to advertise and grow their business on our apps. »

This new update is aimed at advertising that boosts the visibility of social media posts, but there’s a carveout for more traditional kinds of ads, so Meta’s larger business model is unaffected by this move. The policy 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. Apple can basically charge developers whatever they want as long as they can get away with it. In some locales, it can’t get away with it: South Korean law enforcement raided Apple’s headquarters after persistent complaints of overcharging from iOS developers. Meta didn’t respond to a request for comment.

The boosts 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 getting kicked out of the marketplace.

Regulators in other countries, where rules about competition are far more strict, have forced Apple to allow apps to use other payments systems that don’t take such a big cut of the revenue. Google has faced scrutiny for similar policies in 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 kicked out of the App Store for providing third-party payment options. A judge has ruled that Apple can’t stop app developers from including links to other payment systems.

Apple says it takes this money just to protect you. The company reviews apps for security, privacy and fraud issues, including verification of payment systems. CEO Tim Cook argued that it is expensive to maintain and that a 30% reduction is a reasonable fee as the money is needed to protect consumers which also benefits developers as it creates a market of trust .

Apple invented the App Store. Proponents (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 singular, regular service, but rather the portal to all other iPhone apps. Critics say 30% is way more than Apple has to pay for app review, and what’s really going on here is a monopoly treading water, charging protection money to anyone who wants to cross the gates of Cupertino.

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

Leave a Comment

Your email address will not be published. Required fields are marked *