Andrew Hoyle/CNET
Apple’s 30% tax on revenue made through its App Store may have rubbed another tech giant the wrong way: Facebook. Earlier in the month, Facebook announced a new feature that allows influencers and businesses to host online events that users would need to pay to access. Apple charges a fee, typically 30%, on all purchases made through an iOS app, but Facebook hoped the iPhone maker would make an exception for this ostensibly community-oriented tool. Apple declined.
On Thursday, Facebook told Reuters it tried to inform iOS users about Apple’s fee, explaining why event organizers would receive 70% of their earnings, but Apple blocked this on the basis of it being “irrelevant” information. Facebook previously said it wouldn’t take a cut of any of the money made by organizers with the tool for the next year.
“Now more than ever, we should have the option to help people understand where money they intend for small businesses actually goes,” a Facebook spokesperson said to CNET. “Unfortunately Apple rejected our transparency notice around their 30% tax but we are still working to make that information available inside the app experience.”
Apple was contacted for comment but did not immediately respond.
A demo of Facebook’s upcoming paid event feature.
Facebook’s complaint is timely, as Apple is embroiled in a lawsuit with Epic Games over the same issue. Epic’s smash hit Fortnite was kicked off the App Store earlier this month after Epic created a direct payment scheme that would allow Fortnite players to buy in-game currency directly from Epic, rather than through Apple, circumventing Apple’s 30% tax. Epic responded by suing Apple and Google, who booted Fornite of its Play Store for the same reason.
Facebook is pitching the new feature as a much-needed tool for struggling small businesses, creatives and influencers in the COVID-19 era, where in-person gatherings are restricted. In the mid-August blog announcing the paid events feature, Facebook pledged to not charge any fees through the feature for “at least 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,” the blog said. “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 SMBs will only be paid 70% of their hard-earned revenue.”
