Apple attacks social media. Demands 30% of revenue from boost post ads

After significantly hurting Facebook’s revenue by embedding features that prevent users from tracking their online activity on the iPhone, Apple is introducing a new policy on the App Store where it wants to cash in on some of the money social networks make on mobile. Under the new policy, transactions in which users pay the social network to “boost” certain items will be charged like all other transactions on the app store.

Apple to treat in-app ads as in-app purchases

This means that social networks will have to give up 30% of the money that companies and other users pay to push their content on its platform to the front of the line, just because it’s happening from an Apple mobile device. In a way, Apple wants to make money from social media ads, without offering anything other than the platform the user is accessing to get to services in apps from Meta, Twitter and others.

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Meta reps responded to this by pointing out that Apple has said in the past that it won’t “mind” ad dollars:

“Apple continues to evolve its policies to grow its own business by undermining others in the digital economy. Apple has said in the past that it wouldn’t take a cut of developers’ ad revenue, and now appears to have changed its mind. We remain committed to giving small businesses easy ways to run ads and grow their business in our apps.”

Facebook says this new rule won’t affect its revenue much, since the boost isn’t from the main Facebook app, but from the Business Manager app, which falls under other rules. Because it’s a separate app, and because the ads appear in the Facebook app, not Business Manager, Facebook currently has a period where it won’t have to share money with Apple. However, in the future, the rules could be changed to cover this loophole.

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TikTok, Twitter and other social networks, however, offer “boosts” directly from the main app and will have to comply.

After product and service price hikes, this will be the next way to boost profits within the company

Apple justifies this decision by saying it’s nothing new that it takes a commission on App Store transactions:

“For many years, the App Store rule has been clear: sales of digital goods and services from apps must use the In-App Purchasing system. Boosting, which allows an individual or organization to pay to increase the “reach” of a post or profile is a digital service, so of course In-App purchases will be required. This has always been the case and there are many examples of apps doing it successfully.”, said Peter Ajemian for Apple for The Verge.

As with other App Store subscriptions or sales, it will most likely be customers who will feel this “Apple tax”. Typically, companies offer more expensive services on the iPhone to lessen the impact the 30% fee has on revenue. For example, YouTube Premium is 30% more expensive in the iOS app than it is if you access the site from the browser.

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