Apple will temporarily drop its contentious App Store fees for businesses that have been forced by the pandemic to pivot to online-only events, in an unexpected concession after increasingly vocal complaints over the rules of its store.
The exemption, which lasts until the end of the year, will affect sales made through the iPhone apps of companies including Facebook, Airbnb and the exercise class-booking platform ClassPass.
Apple typically takes a 30 per cent cut when iPhone or iPad users buy digital goods through an app, a commission that has recently led to a legal battle with Epic, the maker of the popular Fortnite game.
Typically, the fee does not apply to “real world” services, such as home rentals through Airbnb or gym sessions bought on ClassPass. The rule has led companies like Netflix and Amazon to sell their video subscriptions or books through their websites, rather than their iPhone apps, to avoid the fees.
Apple will still charge its 30 per cent fee on gaming apps, as these are not examples of businesses forced to pivot amid the pandemic.
The new concession came after Facebook accused Apple last month of putting a huge burden on small businesses that are trying to pivot to sell more digital services during the coronavirus pandemic.
Many companies such as ClassPass have begun selling tickets to online classes through their iPhone apps, while Facebook launched a new feature to allow business to host events via its app, for example.
Facebook said Apple had now relented, allowing the social media company to use its own system, Facebook Pay, to process payments for such businesses until the end of the year, except in the case of games companies. Apple confirmed that Airbnb and ClassPass were also captured by the temporary waiver.
“Apple has agreed to provide a brief, three-month respite after which struggling businesses will have to, yet again, pay Apple the full 30 per cent App Store tax,” said Facebook.
This week, Epic and 12 other companies including Spotify and Match Group, the parent of online dating app Tinder, launched an advocacy group, the Coalition for App Fairness, to call for reforms, transparency and oversight.
Earlier this week, Apple revamped portions of its website to fight back against claims that its fees were a form of “highway robbery”, as House antitrust committee chairman David Cicilline called it earlier this year.
“To ensure every developer can create and grow a successful business, Apple maintains a clear, consistent set of guidelines that apply equally to everyone,” Apple said on Friday.
Apple released statistics meant to demonstrate how much work goes into curating the App Store on behalf of consumers and developers. For instance, more than 500 Apple experts review 100,000 apps each week, and in 2020 alone more than 60m reviews considered spam were removed, it said.
Tim Sweeney, Epic chief executive, ridiculed these stats in a tweet, calculating that 500 reviewers working 40 hours a week would only need 12 minutes to look at each of the 100,000 apps. “So, A developer spends 1000s of hours creating an app, and 100s of hours updating it. Apple spends 12 minutes reviewing the update and takes 30%,” he said.
Vivek Sharma, vice-president of Facebook Gaming, described the exemption of gaming apps from the fee waiver as a “concession to get the temporary reprieve for other businesses”. He added that Facebook Pay would not charge gaming creators using the online events featured on a desktop, rather than via the App Store, until at least August 2021.
Apple said it was not extending the exception to Facebook gaming creators as they had not been impacted by the pandemic.