Apple blocked Facebook's attempt to tell users about 30% App Store 'tax'
Facebook asked for a pass on Apple's 30% App Store fee but was denied. It says it tried to tell users about the fee but Apple blocked it.
Apple's 30% fee on revenue made through its App Store has rubbed another tech giant the wrong way: Facebook. Earlier this month, Facebook announced a new feature that let influencers and businesses host virtual events that people must 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-focused tool. Apple declined.
Facebook tried to inform iOS users about Apple's fee, explaining why event organizers would receive only 70% of their earnings. But Facebook said Apple blocked this information on the basis of it being "irrelevant," according to Reuters, which first reported the issue. Facebook previously said it wouldn't take a cut of 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 told CNET on Thursday. "Unfortunately Apple rejected our transparency notice around their 30% tax but we are still working to make that information available inside the app experience."
Facebook CEO Mark Zuckerberg reportedly said Apple has a "stranglehold as a gatekeeper on what gets on phones." Zuckerberg told his employees during a meeting that the iPhone maker "blocks innovation, blocks competition" and "allows Apple to charge monopoly rents," BuzzFeed News reported Thursday.
Apple and Facebook didn't immediately respond to a request for comment on Zuckerberg's reported remarks.
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 plan that would allow Fortnite players to buy in-game currency directly from Epic, rather than through Apple, circumventing Apple's 30% fee. Epic responded by suing Apple and Google, which booted Fornite off its Play Store for the same reason.
A demo of Facebook's upcoming paid event feature.
Facebook is pitching the new feature as a much-needed tool for struggling small businesses, creatives and influencers amid the COVID-19 pandemic, 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."