Apple forces Line to remove the ability to send virtual items as gifts from its iOS app
Asian mobile messaging service Line is seeing early success with its monetization model — to the tune of $58 million in revenue for Q1 2013 — but there's a little bad news today as the company …
Context & Ripple Effects
Line enters this confrontation from strength: the company has just reported $58 million in Q1 2013 revenue built on selling stickers and virtual items inside its chat app, making it one of the first Asian messengers to prove that a free messaging client can carry a real consumer-payments business. That success is exactly what puts it in Apple's crosshairs — virtual gifting sold inside an iOS app falls under Apple's in-app-purchase regime, and Apple has now forced the feature out.
The story traveled unusually wide for an app-policy dust-up: TechCrunch, MacRumors, Cult of Mac, App Advice and others all picked it up on or about May 10, 2013, and Line itself confirmed the removal on its official blog — signaling that both sides treated it as precedent-setting rather than routine.
First-order effects
- iOS users of Line immediately lose the ability to send virtual items as gifts inside the app, cutting off one of the payment flows behind the $58 million quarter Line just reported.
- Apple demonstrates that its in-app-purchase rules bind even fast-growing foreign messaging platforms, not just Western game developers.
Second-order effects
- Rival messaging apps building sticker-and-gift economies must decide whether to comply on iOS, route purchases outside the app, or accept weaker monetization on Apple's platform — a choice that shapes where each messenger invests its payments engineering.
- Developers watching the case learn that 'gifts' between users are treated as taxable in-app purchases, pushing social-payment features toward web-based purchase flows that sit outside Apple's review.
Third-order effects
- If enforced consistently, the ruling draws a durable line: any peer-to-peer digital good exchanged inside an iOS app becomes platform-taxed commerce, giving Apple a structural claim on the emerging chat-app payments economy.
- The pattern points toward recurring friction between Asian messaging platforms' monetization experiments and Western app-store gatekeepers, with platform owners — not the messengers — setting the terms of what social commerce is allowed to exist on mobile.
The trend: Messaging apps are becoming consumer-payments businesses, and platform owners like Apple are asserting their in-app-purchase tax over exactly those flows.