The “Apple tax” exists. It has been around for a long time now, but that doesn’t mean many people out there in the world are fans of it. And, indeed, many of those voices of dissent are starting to get louder.
In light of a dust up between Epic Games and Apple (and Google), Facebook has decided to weigh in and offer its own viewpoint of the situation. As reported by The Verge, the social network says Apple’s baseline tax within the App Store is making it so it has to charge more to customers for a brand new app and digital platform. Facebook announced that Apple’s refusal to waive the fee is having a negative impact on a brand new digital platform it’s launching, and is by association making it harder for Facebook to help struggling small businesses.
First, here’s what Facebook is launching: it’s a new digital platform designed to make it easier for even organizers to create paid online events. Due to the ongoing coronavirus pandemic in-person events have basically been scrubbed from the schedule, so this new digital platform, according to Facebook, would make it easier for groups to create paid online ones.
Now, due to the “Apple tax”, the one Apple is refusing to waive for this particular Facebook venture, the social network says it has to charge more to event organizers and businesses to make up for the fee. Facebook also notes that Apple isn’t allowing the company to use its own payment method within the iOS app, as Apple’s requirement is to use the company’s payment method.
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,” says Fidji Simo, the head of Facebook’s main app, in a statement
To support small businesses and creators, Facebook will not collect any fees from paid online events for at least the next year,” Simo adds. “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, on a call with reporters on Friday, further clarified that this policy would remain in effect “while communities remain closed for the pandemic.
This new feature will be part of the main Facebook app and will serve as basically a one-stop-shop to handle all the essentials of launching an online event, allowing them to “create an online event, set a price, promote the event, collect payment and host the event, all in one place”. Facebook wants to create the platform to give organizers, businesses, and others to recuperate some of the money they have probably lost due to the ongoing pandemic.
This isn’t the first time that Facebook has run into an issue with Apple’s policies associated with the App Store. Earlier this month, for instance, Facebook launched a dedicated gaming app –Facebook Gaming– that doesn’t actually have any games available to play within it. Those who download the app on iOS can watch other people play games, but they can’t play games themselves. This rule also connects to Microsoft’s inability to launch its xCloud video game streaming service, which Apple will also not allow on the App Store.
But the big deal this week is Epic Games and the company’s decision to bring Apple into the court of public opinion and hash it out there. Apple managed to basically skate by at the U.S. antitrust investigation recently, but Epic Games and other companies are starting to become a lot more vocal regarding Apple’s 30% (and sometimes 15%) “Apple tax”.
Now, a recap
Here’s a quick refresher: Yesterday, Epic Games updated the popular battle royale game Fortnite to add a direct payment option within the iOS (and Android) apps, bypassing and ignoring Apple’s and Google’s rules. As a result, Apple pulled Fortnite from the App Store, not allowing any new downloads of the game and blocking subsequent software updates as well. Immediately after that, Epic Games launched a social media campaign with a hashtag and everything, asking Fortnite fans to tweet at Apple and demand they “#FreeFortnite*. Epic Games wants Apple to abolish the tax altogether, or at least reduce it, and Epic’s CEO Tim Sweeney would very much like the opportunity to launch his own digital storefront on iOS (and probably Android) devices at some point in the future.
Google, for its part, also removed Fortnite from the Play Store.
Epic Games sued both Apple and Google, claiming anticompetitive behavior across the board. And now this will probably last months, but the result may actually be pretty interesting because Apple has already made it pretty clear that it doesn’t plan on changing the rules or the fees associated with its digital storefront.
This probably won’t be settled any time soon, and if this trend continues we’re going to be hearing from a lot of different companies, both big and small, as they rage against Apple’s machine.