Facebook is perpetuating its public, corporate spat with Apple over App Store fees, this time calling the iPhone maker out for blocking a disclaimer. As is usually the case with “App Store tax” disputes, the party criticizing Apple is perhaps ethically correct, but the manner in which the opposing company handles the issue comes off as petty. More importantly, Facebook is the last company that could successfully shame Apple into changing a policy that makes it millions of dollars annually.
The phrase “App Store tax” or “Apple tax” doesn’t refer to an actual sales tax. It’s a cute way to describe Apple taking a 30% cut of all transactions made on the App Store or through in-app purchases. This is a common practice and it’s employed by most tech companies hosting digital storefronts (including Google: the Play Store also takes 30%). Most people aren’t upset at a business seeking to earn a profit for a service it offers. The drama comes from Apple being strict about what it considers to be an in-app, App Store purchase. In short, that definition includes everything.
Like Epic Games before it, Facebook is publicly opposing Apple’s 30% fee and labeling the company as anti-consumer in the process. Earlier this month, this was represented when Facebook complained that Apple wanted to profit from the upcoming paid live video service. The feature was intended for small business owners to hold online seminars with a paywall and, since Apple considers that fee an in-app purchase, it argued that the tax should apply (Google waived its fee for this). Following that dispute, Facebook elected to include a disclaimer on the iOS version of the paid live events checkout screen reading, “Apple takes 30% of this purchase”. In a conversation with Reuters, a Facebook rep says Apple prohibited the company from posting said disclaimer.
Facebook Justifies the Need for an App Store Tax Warning
Facebook has leaned hard in the direction of criticizing Apple for being non-transparent about its fees. Its representative says the disclaimer was only intended to keep users aware of where the money they think goes towards supporting small businesses is actually being funneled. That’s an undoubtedly noble cause but there’s also some careful omission of information in Facebook’s version of events.
Facebook only plans to waive its own fees on these transactions “for at least the next year”. The idea is that businesses hurt by COVID-19 need financial support, so taking a cut of their profits is immoral. This is, again, not necessarily nefarious but it’s still hypocritical for Facebook to publicly lambast Apple for a policy that it will also potentially adopt in a year’s time.
The other mildly suspicious part of this is Facebook’s disclaimer for Android users. The original post on the Facebook blog outlining its problems with the App Store tax showed the aforementioned disclaimer for Apple device owners, but it also showed one for Android saying “Facebook doesn’t take a fee from this purchase.” That, of course, lines up with Facebook’s statements about the feature but, in the released version, that disclaimer is gone along with the Apple one.
This makes it easy to conclude that Facebook’s intentions weren’t simply increased transparency about where people’s money goes. It gives the appearance that Facebook only planned to post the disclaimer that it doesn’t take a fee if that meant it could shame Apple’s business decision on this issue. Expect more pettiness from giant corporations in the future as Apple has yet to respond and Facebook says it’s still searching for ways to share information about the tax inside the app.
