Meta says Apple updated its App Store rules to require IAPs for social media “boosts” to grow its business “while undercutting others in the digital economy”

Just when I thought the relationship between Apple and Meta couldn't get more hostile, here we are.

The Verge 2022-10-26 Alex Heath

Context & Ripple Effects

Apple's new App Store guidelines for social-media boosts turned a distribution rule into a dispute over who controls the payment flow for promotional spending. It also extends an already public fight over platform fees: Apple had challenged Meta's own 47.5% Horizon Worlds fee months earlier.

The subsequent plan by Meta to add a 30% iOS boosting fee shows why the rule mattered beyond policy language: a requirement imposed on a transaction can be translated into a charge borne by the buyer.

First-order effects

Meta must route purchases of Facebook and Instagram post boosts on iOS through Apple's in-app-purchase system, giving Apple control over the transaction path.
Businesses buying boosts through Meta's iOS apps face a payment rule that Meta says advantages Apple's business at the expense of digital-economy rivals.

Second-order effects

Other social-networking apps selling post boosts must assess whether to absorb the App Store cost, adjust iOS pricing, or steer promotional buyers to other purchase channels.
Meta's dispute with Apple shifts competitive pressure from ad-targeting features to the economics of acquiring paid promotion on mobile platforms.

Third-order effects

If app-store rules continue to extend from digital goods into promotion tools, platform operators can shape the margins and pricing of businesses that depend on mobile distribution.
The Apple-Meta conflict is becoming a broader contest over whether an app store's control of payments also confers control over adjacent digital-business models.

The trend: App-store governance is expanding from app access into the monetization mechanics of services built on mobile platforms.

Discussion

@eric_seufert Eric Seufert on x
Apple has update its App Store guidelines to require that social media post “boosts” be purchased as IAPs, entitling Apple to 30% of that advertising revenue. This is new as of iOS 16.1, which was released today https://twitter.com/...
@nickstatt Nick Statt on x
Apple will continue to collect tax on every transaction it can on iOS. I truly think they'd come for Amazon, DoorDash and Uber if they felt they could get away with it. https://twitter.com/...
@jameshercher James on x
Apple has reached a point of being a bad-faith operator. Is anyone even gonna bother to explain what makes this an in-app purchase? Obvi it's the 30% cut, but I mean cmon it just is contempt for the truth at this point. https://twitter.com/...
@exiledsurfer Michael Parenti on x
pot calls kettle black https://twitter.com/...
@akindolu Sola Akindolu on x
Apple is doing to Meta/FB what they do to media publishers. Power moves suck when you are on the receiving end.
@uwukko @uwukko on x
it's hilarious how apple forbids developers from doing regular stuff like putting a link for external billing anywhere near the app yet allows literal gambling apps and even serves ads for them https://twitter.com/...
@richlightshed @richlightshed on x
Suspect most people missed this on Apple's new “boost” post policy via @alexeheath @verge “The difference for Facebook and Instagram is that they currently don't use Apple's in-app purchase system for boosting posts while Twitter, TikTok, and others do” https://www.theverge.com/.…
@dangillmor Dan Gillmor on x
How monopolists operate: https://twitter.com/...
@keleftheriou Kosta Eleftheriou on x
When finally allowed, alternative app stores could offer something that no longer exists: An app store free of ads. https://twitter.com/...
@markgutman9 Mark Gutman on x
As is their right. One of the things that I have never understood if why investors don't apply more of a risk premium to businesses that are entirely dependent on these platforms. Like, where would someone like $UBER go if the app is not available on Iphones? https://twitter.com/…
@sal19 @sal19 on x
For anyone seeking context regarding the impact that Apple's decision to take a 30% cut of boost ads will have on Meta, this is something that the two companies have been going back and forth on for years, per my reporting in August https://www.wsj.com/...
@mergesort @mergesort on x
Hate to beat my usual content moderation drum but programmatic advertising is user generated content, and user generated content requires moderation. App Store scams are proof that Apple doesn't do moderation well, and even worse is that you can't even report a bad App Store ad. …
@gartenberg Michael Gartenberg on x
“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.” https://www.theverge.com/...
@anshelsag Anshel Sag on x
.@Apple is on an all-out assault on @Meta and its quite clear why. If they destroy Meta's ability to make money, they can't compete in the #XR space with appropriate R&D spending and other investments. We're already seeing the results of that with Meta. https://twitter.com/...
@film_girl Chriscreama Warren on x
Does Apple really have to lean-into being the villain with the App Store at every opportunity? Like, come on guys. This isn't Taylor Swift's Midnights. You're not the Anti-Hero. You're just an asshole at this point. https://www.theverge.com/...
@michaelbtech Michael Brown on x
Apple v. Meta just might be the biggest Big Tech War and it's just begun. Apple first started to kill ad tracking on the iPhone, hurting Meta's ad business by $10billion. Now Apple is starting to ramp up its own ad tracking on the iPhone. 🤔 🤔 🤔 https://www.theverge.com/...
@fosspatents Florian Mueller on x
@TimSweeneyEpic @benedictevans Apple definitely didn't want to square off with the DOJ and 36 U.S. states as it will have to on 11/14. It's a different game now and Apple will lose it.
@tonyarnold Tony Arnold on x
This is disgusting. You can start your “Apple is doomed” tweet generator now. This is compromised ethics writ large. https://twitter.com/...
@alexeheath Alex Heath on x
Apple responds to Meta: “For many years now, the App Store guidelines have been clear that the sale of digital goods and services within an app must use In-App Purchase...
@bcmerchant Brian Merchant on x
Going to need some further context here, for example on whether the Facebook spokesperson kept a straight face as they complained about another tech company “growing their own business while undercutting others” https://twitter.com/...
@alexeheath Alex Heath on x
Apple clearly feels the need to defend itself here, though this defense doesn't explain why the company felt the need to update an apparently clear policy. Also, it's pretty remarkable to see OG Apple devs tweet this stuff about the company's own ads push: https://twitter.com/...
@gfodor @gfodor on x
Apple's maximal win condition is selling you all your hardware and taking a cut of all your online transactions. Meta's maximal win condition is mediating every interaction of your body with reality and other humans and being paid to modify your behavior. Choose your poison :/
@nikitonsky Niki Tonsky on x
I wish Apple had some other way to earn money, like selling software or hardware directly. Maybe a subscription service or two? https://twitter.com/...
@uwukko @uwukko on x
apple is the same company that goes “erm no we can't allow your app on the store because you're russian” and then allows gambling apps like what the fuck https://twitter.com/...
@anildash @anildash on x
Somebody in some meeting at Apple made a good case for a bad idea. https://twitter.com/...
@madthunderdome @madthunderdome on x
Tim Apple absolutely wrecking $META. https://twitter.com/...
@axelroark @axelroark on x
Wtf. Apple has become the Big Brother that their iconic commercial rallied against. https://twitter.com/...
@chrismessina Chris Messina on x
The #AppleSocialNetwork and ad platform is why $meta is in the shitter. Apple is now using the same tactics that Facebook used to grow — while supplanting Facebook's core job to be done. If Zuck can't produce a successful hardware platform, he's toast. #antitrust #iOS161 https://…
@mattnavarra Matt Navarra on x
Apple twisting the knife in Meta's ad business https://twitter.com/...
@eldsjal Daniel Ek on x
Apple continues to disadvantage competitors, and the impact is huge - on consumers, app developers, and now, authors and publishers. Without policymakers taking action, nothing will change. I can't be the only one who sees the absurdity https://www.nytimes.com/...
@elonmusk Elon Musk on x
@eldsjal Concerning
@pat_garofalo @pat_garofalo on x
Apple's monopoly power over apps and app distribution is back in the news this week. Here's why that matters, and why lawmakers at the federal and state level need to tackle Apple's abuse. Buckle up for an App Store thread people! 1/?
@_kylejs_ Kyle Satti on x
What we had to resort to in the end. Discovering and buying audiobooks on iOS is totally broken bc Apple want **30%** of revenue. Maybe this was “okay” in the early days of the App Store when apps were usually the product. But when content is the product, it's just not viable. ht…
@ballmatthew Matthew Ball on x
@TimSweeneyEpic @benedictevans And, if kicked off iOS, Spotify would lose 70% of its revenue... All of which would go to Apple's own Spotify competitor?
@timsweeneyepic Tim Sweeney on x
@benedictevans Yes and Apple's working to undermine Spotify's good reputation with their anti-Spotify PR campaign, touting that Apple Music (whose popularity is tilted towards high-income developed economies with higher subscription fees) pays artists more per song than Spotify.
@brandonking4787 Brandon King on x
Apple has rejected our app 10 times in the past month because they want us to use in app purchases. MONOPOLY. https://twitter.com/...
@timsweeneyepic Tim Sweeney on x
@benedictevans We launched direct payments on iOS, passing on 20% savings to customers who used our payment service. Apple blocked Fortnite because of it. Hard to more clearly demonstrate the underlying monopoly rent extraction than that. https://m.youtube.com/...
@foadafshari Foad Afshari on x
@migueldeicaza @eldsjal Of course he is. Spotify is the largest distributor of streaming music and probably podcasts, in large part because they piggybacked on core technology that exists on iOS that Apple developed. However, Spotify feels that they should pay $0 to Apple.
@benedictevans Benedict Evans on x
@TimSweeneyEpic Spotify is not a tiny indie developer.
@nirzicherman Nir Zicherman on x
One thing I know for sure is that there is huge growth potential for both the supply and demand of audiobooks. I feel very proud to work at a company that's making that future a reality despite all the hurdles that make it challenging 🙌 https://www.nytimes.com/...
@wolfejosh Josh Wolfe on x
Daniel (Spotify) + Tim Sweeney (Epic) are on the side of right on this https://twitter.com/...
@migueldeicaza Miguel de Icaza on x
@eldsjal @ballmatthew I am surprised you are surprised, this rule is well understood. You are trying to do a side transaction, and that's not currently allowed. We're you trying to pull a Sweeney?
@trippmickle Tripp Mickle on x
Have you tried to buy an audiobook on Spotify? Here's the story behind why the process initially took nine steps. https://www.nytimes.com/...
@chrisamccoy McCoy on x
Apple 💯 is a bully and deserves an anti-trust look. $24b in app store fee revenue, 80% margins, compete against their own developers, etc. etc. https://www.nytimes.com/...
@timsweeneyepic Tim Sweeney on x
@benedictevans But sure feel free to propose a tiny beloved indie developer whose business was crushed by Apple who could go on to fund a multi hundred million dollar antitrust case against Apple and Google. 😀
@jherskowitz J Herskowitz on x
“The [Apple App] store, which is estimated to generate about $24 billion in annual sales from the 30 percent fees it collects, has little overhead and generates profits of nearly 80 percent...” https://t.co/Je2bzX9ESa
@neilkatz Neil Katz on x
@eldsjal @ballmatthew Apple charging everyone a 30% tax while competing directly against said companies for books, movies and music is the definition of platform abuse. But unlike prior monopolies, they are beloved. Consumers are on their side.
@benedictevans Benedict Evans on x
Posit: Epic was Apple's dream opponent in an App Store ourt case. Unlike a lot of other examples (including today's), Apple wasn't constraining Epic's business model, product, experience or innovation at all - in fact Epic was arguing for a worse UX. The worse possible test case
@shiraovide Shira Ovide on x
The disputes between Apple and developers over app store fees are often in secret. Not this one. https://twitter.com/...

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