Facebook Highlights How Small Businesses Were Hurt by Apple’s In-App Fees during Pandemic

BY Mahit Huilgol

Published 14 Aug 2020

Facebook has joined the growing list of developers to publicly criticize Apple over App Store fees. The social media company says Apple’s fee structure has hurt small businesses during the pandemic. Epic Games put up a display of resistance by bypassing App Store commissions on Fortnite. Apple acted swiftly and removed Fortnite from the App Store. Epic has filed an antitrust lawsuit against Apple and even released a short film that mocks Apple’s iconic 1984 ad.

Facebook introduced a new feature that allowed business owners to charge for live streaming. The paid event was rolled out in 20 countries and included yoga class, cooking class, or an informative seminar. Apple didn’t agree to waive off its 30% fees for all transaction that takes place within the app even during the pandemic. Moreover, they didn’t allow Facebook to use their payment system and process the payment.

Things were a little bit different on Android. According to Facebook, even Google didn’t waive off a 30% fee. However, it allowed Facebook to use its payment system, thus effectively bypassing Play Store fees. Facebook added that it was not taking any part of the revenue generated during the live streaming.

Facebook says, “We went through our usual channels to suggest strongly to them to waive their fee or to let us use Facebook Pay — one of the two –, and they declined.” Facebook agreed that it makes use of Apple’s App Store to distribute its apps. However, it feels Apple’s fee structure is unfair.

Interestingly, in the iOS app, Facebook has also mentioned that Apple takes a 30% cut on the payment screen, and in the Android, it has mentioned that Google doesn’t take a fee for the purchase as you can see below.

Facebook Online Events - Payment flow

Our Take

Apple does not charge App Store fees for items like in-person classes. Due to the pandemic, a majority of businesses have gone virtual, and this meant they had to share revenue with Apple. At the recent anti-trust hearing, Tim Cook said he would work with companies that have moved to virtual due to the pandemic. It is not clear what makes a compelling case for Apple to waive off or even reduce App Store fees. The company had roped in Amazon and halved the fees to 15%. We wonder what is stopping Apple from extending the same to other apps, especially during the distressing times.

[via Bloomberg]