Apple’s Latest Policy Update Hits Meta Where It Hurts

Apple’s Latest Policy Update Hits Meta Where It Hurts

Published: November 02, 2022

Apple updated its App Store policy to clarify that paid social boosts are, in fact, in-app purchases, which would entitle it to take a 30% cut on each transaction.

The latest move is expected to impact Meta-owned Facebook and Instagram severely.

In doing so, Apple allowed services such as Facebook and Instagram to offer apps that enable people to buy and manage advertising campaigns without relying on Apple's payment system.

However, the boosts purchased through these apps are to be treated as in-app purchases, giving Apple a big take on each purchase.

Meta claims that the changes Apple is introducing target Facebook and Instagram specifically and that Apple’s undercutting its competition with every change it makes.

"Apple continues to evolve its policies to grow their own business while undercutting others in the digital economy,” said Meta spokesperson.

Apple, on the other hand, disputes its claim of having too much power over mobile app distribution and targeting competition, and that they’ve considered boosts to be in-app purchases even before the latest change to the policy. All they needed to do was clarify that stance.

"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," said an Apple spokesperson.

"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 Purchase is required. This has always been the case and there are many examples of apps that do it successfully."

The competition is heating up, as Meta claims Apple is crossing boundaries by taking a cut of its advertising revenue. Meta pointed to Epic Games' trial over App Store rules when Apple said it didn’t take a cut of ads.

“Apple previously said it didn’t take a share of developer advertising revenue, and now apparently changed its mind. We remain committed to offering small businesses simple ways to run ads and grow their businesses on our apps,” the Meta spokesperson told CNBC.

The battle between the two tech giants has been raging on for some time but gained more traction when Apple introduced App Tracking Transparency, allowing its users to deny Meta access to unique device IDs to track ad performance.

The two companies are also facing off on hardware turf, with Meta releasing its Quest Pro headset and Apple planning to release a VR headset next year.

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