Meta, Spotify Blast Apple Over App Store Fee Enforcements

Apple announced various App Store developer updates last week, and one change getting lots of attention is that which specifies “sales of ‘boosts’ for posts in a social media app must use in-app purchase.” That means Apple will be taking its customary 30 percent fee for paid boosts on iOS devices, a move that will primarily affect Meta Platforms’ Facebook and Instagram, since they hadn’t previously been processing such transactions through Apple’s in-app purchase system, like Twitter and Tiktok have. Apple says its “guidelines have been clear” that in-app sales are required to use its In-App Purchase.

“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 has always been the case and there are many examples of apps that do it successfully,” Apple spokesperson Peter Ajemian told The Verge.

But Meta is crying foul, with company spokesperson Tom Channick countering back that “Apple continues to evolve its policies to grow their own business while undercutting others in the digital economy,” according to The Verge.

“Apple previously said it didn’t take a share of developer advertising revenue, and now apparently changed its mind,” said Channick. “We remain committed to offering small businesses simple ways to run ads and grow their businesses on our apps.”

Meta is not the only one complaining. Axios quotes Spotify CEO Daniel Ek telling investors at a conference last week that Apple keeps “moving goalposts,” and calling “Apple’s purchasing flow ‘inherently broken because Apple decidedly wanted it to be broken.’”

Ek was reacting to a provision in the App Store Review Guidelines for developers that would prohibit Spotify from adding buttons or URL’s linking to information about out-of-app purchase of audiobooks. Spotify associate general counsel Harry Clarke said “Apple is putting less imagination behind innovation, while simultaneously doubling down on collecting tolls and stifling competition,” adding, “they are leveraging every tool in the monopolist’s playbook,” according to Axios.

The Verge points out that Apple’s policy on paid boosts “is, at least publicly, an about-face” from its position last May, when “during the Epic v. Apple antitrust trial, App Store boss Phil Schiller testified that the company had never taken a cut of iOS developer ad revenue. Going forward, that won’t be true anymore.”

Aspects of the new guidelines seem directly at odds with Apple’s settlement in that case. Apple is also facing antitrust charges in the EU for its mobile payment practices. “New laws in South Korea and the EU’s Digital Markets Act will compel Apple to allow rival in-app payment systems,” Axios writes.

While “the new policy shouldn’t have a material impact” on Meta’s revenue, The Verge says “there is concern about the precedent set and that Apple will eventually require the same rule for Meta’s standalone ads manager app,” which Apple currently exempts from the in-app purchase requirement “because the ads that are bought aren’t displayed in the app itself.”

Related:
Spotify Wants to Get into Audiobooks but Says Apple Is in the Way, The New York Times, 10/25/22
Spotify Pulls Audiobook Purchases from iOS App After Apple Blocks Updates, The Verge, 10/27/22

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