
Apple blocks Facebook update that called out 30-percent App Store ‘tax’ - nsnante
https://www.theverge.com/2020/8/28/21405140/apple-rejects-facebook-update-30-percent-cut
======
chrismorgan
I’m curious whether Apple’s conduct here would be illegal in Australia—I
suspect it might be, and believe it should be.

Credit card networks used to tell businesses “you’re not allowed to itemise or
pass this fee on to your customers”; at some point (maybe 10–15 years ago?
Can’t find a reference quickly) this was confirmed to be illegal in Australia:
businesses are allowed to apply a surcharge to cover their transaction costs
(and nothing more, though in practice I think many businesses just apply a
flat rate like 1–2% which will be higher than their costs for some
transactions), per [https://www.accc.gov.au/consumers/prices-surcharges-
receipts...](https://www.accc.gov.au/consumers/prices-surcharges-
receipts/credit-debit-prepaid-card-surcharges).

The relevant legislation only applies to certain payment methods, so it would
probably not be directly applicable to Apple’s 30% tax, though perhaps other
legislation might protect your ability to at least itemise it (I don’t know);
but given that the payment are probably ultimately coming from such payment
networks, I wonder whether Apple could become subject to this rule to at least
some extent, so that e.g. they had to let you split out the card transaction
fees from the rest of their 30% cut and itemise and charge it. (And the
purpose of doing _that_ would be to begin pushing them to reduce their absurd
30% tax. Thinking of that, I wonder how many people have complained to ACCC
about the 30% tax—it can’t be zero—and why they haven’t come down on Apple
like a ton of bricks yet, because what they’re doing is basically the same as
what credit card networks did, only 20–50× as greedy and infinitely more
anticompetitive since no alternative is permitted on Apple’s platform, whereas
credit cards had cash and cheques as alternatives.)

~~~
RandoHolmes
I agree that it's irrelevant information.

You can argue that maybe it's unfair to FB, but you know what's even more
unfair? Consumers being caught in the middle of a fight between Apple and FB.
Consumers being manipulated so big tech corp A can try and force a behavior
change by big tech corp B by pissing off its customers.

At the end of the day it's a phone that you call people on. Let the people who
have purchased that phone be.

~~~
fogetti
It's not irrelevant because there might be other platforms where you can buy
the same product cheaper. And the 30 percent cut information might be a good
hint to look elsewhere. I guess that's why Apple fights this so viciously.

~~~
RandoHolmes
Apple isn't hiding how much the user needs to pay for a purchase, they can
still make the determination that they need to go somewhere else.

This would be like Wal-mart putting up signs telling everyone they have to pay
Visa fee's. It's irrelevant to the consumers, what they pay doesn't change.

~~~
SyneRyder
_> This would be like Wal-mart putting up signs telling everyone they have to
pay Visa fee's._

This actually happens in Australia. Because AmEx charges an extra 1.75% to
businesses, stores display a warning at checkout that using an AmEx card will
incur an extra fee of 1.75%.

Edit: Here's an example graphic from the Australian Government website,
explaining that it's illegal for a business to charge more than what it costs
them:

[https://www.accc.gov.au/sites/www.accc.gov.au/files/Surcharg...](https://www.accc.gov.au/sites/www.accc.gov.au/files/Surcharging%20infographic_1.png)

~~~
RandoHolmes
Apple isn't passing the extra fee onto the customer, neither is FB.

I understand your point, but it's not applicable here.

~~~
amaccuish
I think you're confused because Apple is acting as a payment processor (even
though there is another one for the card) and as a marketplace.

~~~
RandoHolmes
Is your argument that apple is passing off the extra 30% fee to the consumer?

If not then what you just said is bullshit.

------
bmarquez
I have no particular love for Facebook, but good for them.

It's one thing to charge a 30% app tax to sign up for "Jasper's Cooking Class"
on an iOS device, but it's even worse to _ban_ disclosure of that tax.
Forbidding that speech is certainly 1984-esque.

~~~
HenryBemis
Easy-peasy.. just like when you go to the super market or a restaurant and the
receipt has the analysis of the amount: $15 pizza, $15 salad, $3 soft drink,
$10 VAT, $8 Apple's 30% fee (I didn't do the math, but you get the spirit).

They CANNOT force you to remove transparency and visibility of the line items.
I understand that they want to hide the 30% cut and not being called out.

They can also split the receipt in three parts:

A) you purchased:

Pizza $15, Salad $15, Soft drink $3

B) Other fees:

Apple's 30% fee $10

C) Taxes:

VAT $3

Edit: it just hit me. Don't write that ONLY in the receipt. Write it up front,
BEFORE a user completes the transaction. Total price of ticket $10. Analysis..
X, Y 30% Apple's fee, VAT.

~~~
thedanbob
This is exactly the issue. Apple blocks your app updates if you explicitly
state the fee anywhere.

------
hiisukun
I wonder how this would interact with various consumer laws. In Australia, for
example, there are standards that prevent ticket sellers for events from being
deceptive about fees - adding costs beyond a reasonable amount required to
provide the service, etc.

I'm not making any specific case, rather just feeling curious about how this
impacts consumer rights and expectations. As a purchaser, I think it might be
fair to know that $3 goes to apple when I buy a $10 cooking class using
Facebook.

Edit: chrismorgan below posted a much more informative comment in this vein
while I typed.

------
inopinatus
Misuse of market power and unconscionable conduct that misleads the consumer
are hard to prove, even in jurisdictions where they're flat-out unlawful and
the consumer regulators have enforcement teeth, but it's almost as though
Apple is actively trying to become a textbook example.

------
perryizgr8
I feel that the condition Apple puts on app devs to not indicate to customers
in any way that 30% of their purchase is going to Apple is the most
problematic. It shows that Apple knows their cut is too high, and customers
won't stand for this rate if they knew what they were paying for. If they
genuinely believe their service is worth 30%, they should be confident about
it, let users understand the break up of their bill. Truly insane levels of
monopoly on display here.

~~~
onlyrealcuzzo
Is this in-place-of or on-top-of the credit card transaction fees?

A lot of in-app purchases are for less than $3. Doesn't Apple need to pay Visa
a $0.35 transaction fee, plus ~3% of the purchase price.

On a < $3 purchase, that's 15%+ already.

~~~
username90
Transaction fees are just 0.3% in Europe since levying a 3% tax on every
purchase is insane and hurts progress. You should probably go after those
companies in USA as well.

Basically in Europe it is illegal to levy an unreasonable tax for generic
services like this. The same applies to Apple.

~~~
onlyrealcuzzo
So is Apple not allowed to take a 30% cut in Europe? How about Amazon for
Kindle books? Are digital distributers allowed to charge 30%? Where does
Europe draw this line?

------
paublyrne
> Apple said the update violated an App Store rule that doesn’t let developers
> show “irrelevant” information to users.

I'm curious which rule this is and to what or whom the information needs to be
irrelevant to to be in breach.

~~~
disillusioned
3.1.3(b) is probably what they're obliquely referencing, but I was once told
by an Apple App Reviewer that "not all of our rules or guidelines are
published" which caused me to have an aneurysm and shout "THEN WHAT'S THE
POINT OF THE RULES?"

"You must not directly or indirectly target iOS users to use a purchasing
method other than in-app purchase, and your general communications about other
purchasing methods must not discourage use of in-app purchase."

2.3.10 has a bit about not including "irrelevant information about Apple or
the development process." It's under the Metadata section, but still:

"2.3.10 Make sure your app is focused on the iOS, Mac, Apple TV or Apple Watch
experience, and don’t include names, icons, or imagery of other mobile
platforms in your app or metadata, unless there is specific, approved
interactive functionality. Make sure your app metadata is focused on the app
itself and its experience. Don’t include irrelevant information, including but
not limited to information about Apple or the development process."

[https://developer.apple.com/app-
store/review/guidelines/](https://developer.apple.com/app-
store/review/guidelines/)

~~~
tristanj
The app store guidelines are a complete joke.

Apple can change the guidelines at any time. They make up 'rules' to their own
benefit. And selectively enforce existing ones so major players get a free
pass.

Developers have no recourse, other than leaving the platform.

~~~
aembleton
> And selectively enforce existing ones so major players get a free pass.

Are Facebook not a major player on iOS?

~~~
tristanj
Facebook isn't a big enough player to get a free pass. Apple know they can
bully Facebook and Facebook will back down (they have done this).

Here's a few examples of Apple selectively enforcing their rules.

Apple agreed to charge Amazon a 15 percent fee instead of the standard 30 for
subscriptions [https://www.theverge.com/2020/7/30/21348108/apple-amazon-
pri...](https://www.theverge.com/2020/7/30/21348108/apple-amazon-prime-video-
app-store-special-treatment-fee-subscriptions)

Apple allows WeChat include Mini Programs. These are 3rd party web pages the
user can install that are tightly integrated with WeChat features. They're
basically apps that run within WeChat. In my opinion this violates the app
store premise BUT WeChat is so crucial to Chinese users Apple can't pull the
app. So they bent and rewrote the rules to allow it.
[http://www.globaltimes.cn/content/1137321.shtml](http://www.globaltimes.cn/content/1137321.shtml)

But, when Facebook tried this with Facebook Gaming, which does something
really similar to WeChat Mini Programs, they got banned by Apple.
[https://www.nytimes.com/2020/06/18/technology/apple-ios-
face...](https://www.nytimes.com/2020/06/18/technology/apple-ios-facebook-
gaming-app.html)

Apple allows Chinese customers to make app store purchases using WeChat Pay or
Ali(baba) pay. Meanwhile in the US, it's impossible to pay using the competing
Facebook pay / Google pay. [https://www.wsj.com/articles/apple-app-stores-
chinese-custom...](https://www.wsj.com/articles/apple-app-stores-chinese-
customers-get-new-way-to-pay-for-purchases-1504078004)

There's also the Hey fiasco
[https://news.ycombinator.com/item?id=23542937](https://news.ycombinator.com/item?id=23542937)
and the Wordpress fiasco
[https://news.ycombinator.com/item?id=24238856](https://news.ycombinator.com/item?id=24238856)
. Meanwhile, Gmail and Netflix are unaffected.

~~~
grapefruit22
I'm a bit confused on this point. What obligates Apple to treat all business
partners the same?

~~~
tristanj
Because that's what they told the US house antitrust committee. Apple CEO Tim
Cook testified that “we [Apple] apply the rules to all developers evenly”. But
that's clearly not true, looking at the examples listed above. The poster-
child is Amazon, which only pays a 15% fee instead of 30%.

Likewise, after Fortnite added an alternative payment option that avoids
Apple's 30% tax, Apple banned not only Fortnite, but engine updates for _all
apps_ that use the Unreal Engine. That's the opposite of what Tim Cook told
congress.

> Epic Games also called out Apple on Tim Cook’s testimonial at the recent
> Congressional hearing.

> “Just over two weeks ago, Apple’s CEO Tim Cook was asked during a
> Congressional hearing whether Apple has “ever retaliated against or
> disadvantaged a developer who went public about their frustrations with the
> App Store”. Mr. Cook testified, “We do not retaliate or bully people. It’s
> strongly against our company culture.” But Apple has done just that,” it
> said in the statement.

[https://tech.hindustantimes.com/gaming/news/apple-
continues-...](https://tech.hindustantimes.com/gaming/news/apple-continues-to-
bully-epic-games-after-taking-down-fortnite-from-app-
store-71597720893658.html)

------
newbie578
I love reading the Apple fanboys comments. Please do keep defending Apple and
it's mafia cut, I am honestly amazed that people cannot see Apple's fault in
this, not only do they make you increase your prices by 43% (to get the 30%
cut, prices need to increase by 43%) they won't let you even explain to
customers the reason why it is more expensive (Hint: they won't let you do it
because they know it is a highway robbery).

When I buy something and get a bill, I like to know how much of the price goes
to taxes, if anything else at least for the transparency.

~~~
awerawerawrjhui
> Hint: they won't let you do it because they know it is a highway robbery

This. If Apple thought their fees were reasonable they wouldn't be so
insistent on hiding them from users.

------
Traster
It's funny, I looked but I can't find where Facebook discloses the credit card
charges that come out of the transaction when you do the transaction on their
website. Doesn't that seem like deliberately misleading anti-consumer
behaviour. Do you transaction on our competitors' device and we'll harangue
you about how your money is going to the evil guys, but do you transaction on
our platform and we'll still take transaction fees, we just won't tell you
about it.

~~~
dwild
Edit: Seems like they don't actually surcharge on Apple device. You can ignore
this comment, I'll keep it for posterity.

I believe it's because they surcharge on Apple platform because of that fee,
thus they want to show why they have to surcharge.

It's like saying that websites shouldn't show shipping if they got a physical
store because at the physical store they didn't show the shipping rate they
got there....

It's possible though that the 30% Apple fee could include the transaction fee,
I guess they could round it up to 28% but then your comment right now would
probably be that the number is incorrect as transaction fees are variable
between cards.

------
Havoc
Apple is going end up getting the short end of the stick here. The optics on
this whole debacle are just too bad.

Walled garden and enforcement of strict rules to protect the user is one
thing, but walled garden to protect profits hits a little different.

~~~
mFixman
Will they though?

They have a complete monopoly on distribution for all iOS devices and are
willing to remove certificates for OSX programs. For all we know, they will
remove SSL certificates for HTTPS websites on Safari if a company oversteps
their bounds too much.

Congress will do nothing about this, and the EU and other governments are busy
legislating other problems.

~~~
SyneRyder
Apple have already gone a step further, they've started intercepting website
traffic and redirecting it to their own walled garden Apple News app instead,
without permission from the websites:

[https://www.macrumors.com/2020/08/13/apple-news-web-links-
re...](https://www.macrumors.com/2020/08/13/apple-news-web-links-redirection-
concerns/)

------
return1
Isnt that breaking consumer protection laws by intentionally misinforming
customers? Users have a right to know where their money is going, and this is
also presents false information to the user about how much the service costs
(much like a receipt or ticket that does not break down the tax)

I m also surprised how people nitpick over apples rules as if they re some
kind of laws. They re not , nobody voted for them and if enough ppl complain
they may change

------
whalabi
> Facebook said that Apple cited an App Store rule that bars developers from
> showing “irrelevant” information to users.

This is incredibly draconian.

I know it's Apple's platform but when ¼ of Earth uses that platform, letting
one company have that much power and control seems dangerous.

------
WrtCdEvrydy
When Epic referenced 1984, I didn't think the Apple folks could read... maybe
they can.

------
xyzal
Why they don't just make purchases on iPhones 30% more expensive?

~~~
chrismorgan
Note that for parity you need to boost prices by about 43%: (100% + 43%) ×
(100% − 30%) ≅ 100%.

(I love sevenths in decimal. One seventh is 0.1̅4̅2̅8̅5̅7̅, two sevenths
0.2̅8̅5̅7̅1̅4̅, three sevenths 0.4̅2̅8̅5̅7̅1̅, _& c._ Just remember 7 × 2 =
14, 14 × 2 = 28, 28 × 2 = 56 and change the six to a seven for some reason and
start again with that, and rotate the whole lot as necessary. It’s just
beautiful.)

~~~
sillysaurusx
I can't help but ask followup questions about what you're saying re: the 7's.

Firstly, why are your numbers wearing hats? (I know it represents a repeating
number, but how do you type numbers with hats? I assume you're not copy-
pasting 5̅7̅1̅ whenever you want to write it out. Is there a shorthand on
MacOS?)

Regarding the 7's, I don't understand the pattern from 0.142857 to 0.285714 to
0.428571. Are you saying that 0.428571 is easy to remember, somehow? Or
derivable from 0.285714? In fact, did you write out these numbers without
using a calculator?

I see what you're saying with 7 x 2 = 14, x 2 = 28, x 2 = 56. And I see that
if you change 56 to 57, then yes indeed it does match the ending of
0.1̅4̅2̅8̅5̅7̅, and then you can repeat the pattern of 7 x 2 = 14, which
matches the ending of your 0.2̅8̅5̅7̅1̅4̅ number. But what's the connection to
0.4̅2̅8̅5̅7̅1̅? It's unclear how to use your trick to go from 7̅1̅4̅ to
5̅7̅1̅. Or even why that's helpful in general, or what the overall connection
is between all of these seemingly unrelated things.

Thanks for sharing!

~~~
chrismorgan
I used U+0305 COMBINING OVERLINE to get the line above the digits. I don’t use
it at all often, so I had to look it up (I know its name but not its number)
and typed it out with my Compose key (using WinCompose since I’m on Windows):
`Compose u 3 0 5 Enter`. Since I do do this just occasionally, I’ve just set
up `Compose ^ _` for it, by placing this line in my ~/.XCompose:

    
    
      <Multi_key> <asciicircum> <underscore> : "̅" U0305 # COMBINING OVERLINE
    

The digits in multiples of sevenths are always the same six digits in order,
recurring: 1, 4, 2, 8, 5, 7; it’s just a question of which digit you start
from. For one seventh, start with the one (0.14285714285714…); for two, the
two (0.285714285714…); three, the four (0.428571428…); four, the five; five,
the seven; six, the eight.

------
lowdose
Tit for tat with the lost of their audience capabilities Facebook leverages
momentum on Apple's tax friction with Epic Games.

------
znpy
The craziest thing is that a 30% cut is close to what most state ask in terms
of taxation.

~~~
chillacy
Yea so as a developer I pay two taxes: The first 30% goes to Apple, the next
30% goes to the government, now for every dollar my app sold for I make 49
cents.

~~~
znpy
now compare how many services you're getting for that 30%: a legal system,
roads, schools, hospitals, an army to defend the nation you live in, in some
countries healthcare etc etc...

now back to apple: for that 30% you're quite literally getting the permission
to keep working.

~~~
chillacy
I mean to be fair I'm getting payment processing and hosting but yea it's a
pretty steep fee.

~~~
znpy
Can I ask you something? Could you evaluate the storage/bandwidth price by
using something like the S3 price calculator as a reference and stripe for
payment processing?

It would be interesting to see how much is apple actually getting on top of
publicly-available, practically retail prices.

------
lvturner
A hilarious and unlikely scenario would be if Apple just pulled the plug on
in-app purchases and forced everyone to charge an upfront fee for their apps.

While the downsides are fairly obvious - there _are_ a few things that this
would improve.

~~~
summitsummit
there does seem to be mounting pressure for the current model to change. i
doubt it will be like the scenario you offered, but i wonder what the options
are.

i suppose more transparency on them getting a cut, and/or decreasing the size
of the cut are plausible.

------
afrojack123
What your thought process should be if your an Apple employee trying to
maximize his value: If the megacorps are equally sized and competing against
each other, your dependence on one employer will go down.

------
thefounder
I believe visa/mastercard has a similar rule. You can't charge more(to
compensate the fees) for credit card transaction either.

~~~
youngtaff
You can in the UK

~~~
jimsmart
Not in most cases, since 2018.

[https://www.gov.uk/government/news/card-surcharge-ban-
means-...](https://www.gov.uk/government/news/card-surcharge-ban-means-no-
more-nasty-surprises-for-shoppers)

------
eanzenberg
Interesting how every big dog is attacking Apple as they continue to be the
lone-wolf in enabling privacy and a secure platform for their users. Apple
users are mostly computer illiterate because its Apple’s mission statement to
enable computing for everyone. Because of their ease of use, they are now
targeted to open up their platform in ways that will jeopardize both their
increasing user-privacy and user-security.

~~~
fsociety
You’re extending too much good faith to a corporation. Apple’s privacy
statements are a strategic position, as is not allowing apps to mention the
30% cut.

If Apple was seriously concerned about their users, they would not be
concerned about apps mentioning the 30% cut - which is a truth!

~~~
eanzenberg
Let me know next time you buy something and receive a distribution invoice
knowing how much it cost to you.

------
NotAnAccountNO
How is informing users of some true fact not protected by the first amendment.
How is this not free speech?

~~~
chillacy
First amendment applies to the US Government, not Apple, but it is a free
speech issue in principle.

~~~
jimsmart
I strongly suspect this is actually not a free speech issue, and just boils
down to contract law. Akin to an NDA.

------
thoughtstheseus
Facebook should also mention the product Apple is “taxing” has near $0
marginal cost (in most cases).

~~~
chillacy
If these events are anything like the some of the AirBnb experiences I've
attended, there's material cost and effort to adding more attendees: more
cooking supplies, more equipment, more instructor attention, more work to
followup, etc.

------
coronadisaster
now it is getting interesting

------
pawnednow
Maybe Facebook should go make phones and then try and waive fees that help
third parties build momentum that they will eventually capitalise on..

I can understand the 30% tax being tough for indie publishers but when I see
companies like hey.com and FB & Epic taking this stance, I feel like they are
being treated exactly how they will treat others if they were in position of
power in the relationship.

~~~
brendoelfrendo
Epic has already demonstrated that they wouldn't treat others this way if the
roles were reversed; they have their own Epic Games Store, where they take a
12% cut on any third-party games sold [0]. They explicitly called out Steam,
which takes a 30% cut like Apple (for the first $10 million in sales, at
least; Steam operates on a tiered model) [1]. Cynically, this is because they
wanted to eat Valve's lunch in a space where Valve is the dominant player. But
ultimately, that's exactly Epic's point here: on PC, it is possible for
someone to introduce a competing platform, while Apple prevents such an
ecosystem on iOS.

[0] Side note: I do think that Epic is guilty of anticompetitive practices
here, because if your game uses the Unreal Engine, they roll the 5% engine
royalty into that 12%, giving a huge advantage to using their product on their
store: [https://www.polygon.com/2018/12/4/18125498/epic-games-
store-...](https://www.polygon.com/2018/12/4/18125498/epic-games-store-
details-revenue-split-launch-date)

[1] [https://www.polygon.com/2018/12/3/18123649/valve-steam-
reven...](https://www.polygon.com/2018/12/3/18123649/valve-steam-revenue-
sharing)

~~~
judge2020
Epic is by no means turning a profit on the Epic store right now.

It's like calling out the taxi companies for being more expensive while Uber
and Lyft are still subsidizing rides with VC and IPO money.

~~~
brendoelfrendo
Yes, they do make a profit: [https://gamerant.com/epic-games-store-revenue-
split-explaine...](https://gamerant.com/epic-games-store-revenue-split-
explained/)

"Sweeney also said that Epic Games makes approximately 5% profit from that
12%, and this could grow to 6-7% as the store grows."

They chose 12% specifically as a balance between profit and undercutting the
competition.

~~~
judge2020
That's profit from game sales, which doesn't necessarily mean profit on a
scale of the entire store when you account for paying developers, running the
servers, getting content to users via CDN, etc. Once Epic is on-par with
steam[0], i'd at least expect a 20% epic tax.

0:
[https://twitter.com/shroudschair/status/1120464329239867392?...](https://twitter.com/shroudschair/status/1120464329239867392?s=20)

