Facebook on Friday became the latest major tech company to criticize Apple for taking a 30% cut of app purchases, adding to growing criticism over what companies say are Apple’s unfair and anti-competitive App Store policies that amount to a “shakedown” of competitors.
KEY FACTS
Apple takes a 30% cut of all app purchases and requires developers use Apple’s payments systems so it can also charge a fee for in-app purchases and subscriptions.
Facebook said Friday it asked Apple to reduce the 30% fee for a new feature letting small businesses charge users for online Facebook events, but Apple “dismissed” their requests and as a result small businesses will only be paid 70% from transactions on iPhones, the company said.
Facebook’s rebuke comes a day after Fortnite owner Epic Games sued both Apple and Google over the 30% fee and launched a public relations blitz against the tech giants with the hashtag #FreeFortnite, arguing the “tax” forces companies to increase prices in order to pay for the fee.
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Music streaming service Spotifty last year filed a complaint with the European Union’s Antitrust Commission over what it called the “Apple Tax,” arguing that it can’t compete with Apple Music—which isn’t subject to the fee—if it has to raise prices to cover the charge.
Though Airbnb and ClassPass don’t normally have to pay the fee because the fee doesn’t apply to physical services outside their apps, they did have to start paying when they began offering virtual classes and information sessions during the pandemic, according to the New York Times, drawing complaints from both companies.
In June, Basecamp founder David Heinemeier Hansson called Apple’s fee a “shakedown” and a “ransom” after the company’s email app was rejected from the App Store because it used a different payments system, adding that “Apple’s abusive behavior with the App Store has been an open secret in the developer community for years.”
CHIEF CRITIC
Apple did not immediately respond to a request for comment from Forbes, but CEO Tim Cook defended the company’s App Store practices at a House Antitrust Subcommittee hearing last month. “For the vast majority of the apps on the App Store, developers keep 100% of the money they make,” he said. “…Commissions are comparable to or lower than commissions charged by the majority of our competitors. And they are vastly lower than the 50-70% that software developers paid to distribute their work before we launched the App Store.”
KEY BACKGROUND
Rep. Jerrold Nadler (D-N.Y.) asked Cook during the hearing if continuing to charge companies a 30% fee as they move their services online during the pandemic amounts to “pandemic profiteering.” Cook responded by saying Apple “would never do that,” and acknowledged he was working with companies to find a solution. But even as Cook said the fee applies to all developers and apps equally, emails released during the hearing show that Apple offered to lower its fee in order to get Amazon Prime Video on devices in 2017.
TANGENT
Google also charges a 30% fee for apps on the Google Play Store, but much of the focus has been on Apple, which is usually more lucrative for developers than Google.
-Rachel Sandler, Forbes Staff
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