Apple released an update to its payment guidelines Monday, demanding that apps use the company’s In-App Purchases tool for “boosts” and promoted posts, which means Apple will take a 30% cut of sales. The move seems to be another policy squarely aimed at Meta (formerly known as Facebook).
A variety of apps lets users promote their content for a small fee. Want more people to see your tweets, dating profile, or that old video game you’re trying to sell? Twitter, Tinder, and eBay will sell you a “boost” to raise it higher in the feed. For years, that seemed to fall into a gray area in App Store policies. Apps that sell “virtual goods” are supposed to use the iPhone’s In-App Payment system, which comes with a big service charge. That’s been true for a long time. But that policy wasn’t always enforced when it came to boosts, and certain apps, like Facebook, got away with taking payments directly and avoiding Apple’s massive fee.
Some apps, including Twitter and Tinder, already use the In-App Payment tool for boosts and promoted posts, but Facebook doesn’t. Apple would likely make a nice chunk of change when it starts enforcing this policy more severely, although Meta may challenge the change. The social media giant is already embroiled in a public fight with Apple over the latter’s recent policy changes, and the tweak to In-App Payment requirements will probably 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 on gobbling up through a number of new advertising projects.
“Apple continues to evolve its policies to grow their own business while undercutting others in the digital economy,” Meta spokesperson Tom Channick reportedly said in a comment to The Verge. “Apple previously said it didn’t take a share of developer advertising revenue, and now apparently changed its mind. We remain committed to offering small businesses simple ways to run ads and grow their businesses on our apps.”
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Apple initially declined to comment, but after this article was published and started gaining traction, the company reached back out to share its thoughts. “For many years now, the App Store guidelines have been clear that the sale of digital goods and services within an app must use In-App Purchase,” said Apple spokesperson Peter Ajemian, in an email. “Boosting, which allows an individual or organization to pay to increase the reach of a post or profile, is a digital service — so of course In-App Purchase is required.”
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 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 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 payment 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 ruled that Apple can’t stop app developers from including links to other payment systems.
Apple says it’s taking this money just to protect you. The company reviews apps for security, privacy, and fraud issues, including checking in on payment systems. CEO Tim Cook has argued that it’s expensive to maintain, and a 30% cut is a reasonable fee because the money is necessary to protect consumers, which benefits developers too, because it creates a trusted marketplace.
Apple invented the App Store. Proponents (and Tim Cook) argue the company should be able to charge whatever it wants. But looking at this another way, the App Store isn’t a singular, regular service, but rather the portal to every other iPhone app. Critics say 30% is way more than Apple needs to pay for app review, and what’s really going on here is a monopoly stomping around, charging protection money for anyone who wants to get through Cupertino’s gates.
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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