
Does Facebook pay Apple 30% of revenue derived from ads made within its iOS app? - spenvo
https://twitter.com/SpencerDailey/status/1299063704483438593
======
spenvo
I submitted with a hesitant title because I'd genuinely love to know, and I'm
surprised there isn't more concrete info on this that's readily available. My
strong suspicion is that they don't, and 9to5mac editor has chimed in on
twitter saying: "Definitely feels muddy, but think Apple is probably
considering FB ads as part of the 'outside goods and services' category.
Guideline 3.1.5a makes apps use direct payment for those".

If that explanation is true ^, then it's pretty rich, because Apple recently
aimed to get 30% of virtual experiences offered through Airbnb. How would
those not be considered "outside goods and services" when they involve people
outside the app providing goods and services? [0] Others are saying Apple
doesn't see it as an "in app purchase"; however, I can click "Place Order" for
an ad in the iOS app... I'd call that an in-app purchase! Can all companies
let you buy digital stuff within the app with non-Apple payments or in a bill-
you-later manner? Just ads?

Almost certainly there have been behind-closed-doors discussions on this, as
the line has been arbitrarily drawn (either way) to include/exclude this
massive company from the 30% tax. Indies don't have the same clarity on the
rules; for example, Marco Arment's app Overcast sells ads, but doesn't
complete transactions in the app because he was worried he'd need to give up
30%. Like with Apple's quiet program that let Amazon and a couple other token
companies get a separate deal on content-app rules [1]: how can small
companies on the store know when to press Apple on some rules and not on
others (without retaining lawyers)?

It's just baffling because Facebook has recently whipped up quite a stir [2]
around Apple requiring 30% of creator revenue, yet none of the articles
mention this point about Facebook ads getting/not-getting a 30% tax for
(probably the better part of) the past decade ... their bread and butter!

Furthermore, Facebook is whining about Apple making IDFA tracking opt-in on
iOS, yet this company has benefited HUGELY from the fact Apple didn't do that
from the start AND somehow decided not to charge 30% on its ad buys on mobile.

[0] - [https://www.nytimes.com/2020/07/28/technology/apple-app-
stor...](https://www.nytimes.com/2020/07/28/technology/apple-app-store-airbnb-
classpass.html)

[1] - [https://stratechery.com/2020/apple-amazon-and-common-
enemies...](https://stratechery.com/2020/apple-amazon-and-common-enemies/)

[2]-
[https://www.google.com/search?biw=1440&bih=798&tbm=nws&ei=RR...](https://www.google.com/search?biw=1440&bih=798&tbm=nws&ei=RRdIX5qlKIuStQWOqY2gCg&q=facebook+fan+event+apple+30%25+livestream&oq=facebook+fan+event+apple+30%25+livestream&gs_l=psy-
ab.3..33i299k1l2.7343.9484.0.10069.11.11.0.0.0.0.193.1171.3j7.10.0....0...1c.1.64.psy-
ab..1.5.646....0.d2Y-NrDiuA8)

~~~
baxtr
From what I understand: The in-app experience is not changed for me as a user.
It doesn’t make my standard app a better app. An ad is consumed by other
people on many other devices including browsers on a desktop. So I think it’s
very reasonable it’s not handled like an in-app purchase. It’s more like a
purchase of a physical item in the amazon app.

~~~
amelius
Ads are a monetization method. I pay a company by consuming ads in their app.
So this is definitely something Apple should charge for: it circumvents normal
in-app payments.

~~~
baxtr
So is ordering physical goods with the amazon app. As I outlined: ads don’t
improve my in-app experience. They rather ruin other people’s experience
somewhere else :-)

------
tomasreimers
This is a great question, and it made me think a lot! So Apple differentiates
a few types of purchases: \- Goods consumed within the app that enhance the
app experience (Game upgrades, new functionality within your camera app) \-
"Reader" apps (NYT, or Wall St Journal) \- Physical Goods and Services
(Amazon, Airbnb) \- so on and so forth

A full list can be found here (on their helpful, seemingly recent, marketing
site): [https://www.apple.com/ios/app-store/principles-
practices/#:~...](https://www.apple.com/ios/app-store/principles-
practices/#:~:text=84%%20of%20apps%20are%20free,%20and%20developers%20pay%20nothing%20to%20Apple).

And the legalese is here in section 3.1: [https://developer.apple.com/app-
store/review/guidelines/#in-...](https://developer.apple.com/app-
store/review/guidelines/#in-app-purchase)

For a few categories, this is very well-defined. For example, a ride in
Uber/Lyft is clearly a good/service consumed outside of the app, a
subscription to Netflix is a subscription, and a +1 life in a game is a
consumable digital good. However, for other categories it is not as clear; for
example, what category does a "Ride Pass" fall under (which lowers the cost of
Uber and Lyft rides, but is a monthly, purely-digital subscription)?

Ads as a whole probably gets bucketed into goods and services outside the app
(because it doesn't improve _your_ app experience). Beyond that, from a
strategic perspective, I suspect Apple isn't trying to get into the b2b game,
their ability to control supply there is probably much lower, esp when the
developer and the user have a direct connection (through a sales person /
customer success rep). However, this raises a really interesting question
towards the category of lighter-weight personal ads (i.e. "Promote this
post"). I suspect that these are not well regulated and probably not equally
enforced. I'd be interested in the comps here: Do Twitter / FB / LinkedIn all
use the same purchase method when you promote a post? How about the dating
apps when you promote your profile? Are those materially different?

~~~
dilse
What about purchased in Amazon app particularly Kindle purchases inside Amazon
app?

~~~
QuotedForTruth
You cant buy kindle books via the amazon app for exactly this reason. You can
only download a sample. If you open the website in a browser though, you can.

~~~
ayyyolo
ahh it all makes sense now...so that's why I have to go to the web to buy
stuff in Fandango/Vudu.

How come these companies don't do something similar for subscriptions? ex: HBO
Now (or whatever the fuck it's called these days) could have a subscribe
button that takes you out of the app to their site - completely circumventing
the in-app subscription purchase. Right?

~~~
blntechie
Because apps can’t link to purchase outside the App Store. Let alone link,
they can’t even mention they can purchase the content elsewhere either with
images, text or any form.

~~~
mtrovo
I think this is so silly on Apple side as they try to have a name on raising
the bar for user experience. And the worse is that before I realized what was
going on I thought it was Amazon fault for some reason, which is even better
for Apple as people would normally blame the developers rather than the
platform for this design decision.

------
hbosch
Apple's 30% only applies to digital content that further enriches the core app
experience. That's my understanding. For instance, Apple does not take 30% of
all Amazon purchases through the Amazon iOS app either. Nor do they skim 30%
from any retail app.

However, if your app happens to be a game (a "free" game, for instance) and
your in-app purchases enhance that game in some way (e.g. unlocking features)
then Apple gets a cut of that.

~~~
gnicholas
The dividing line is digital versus non-digital content. That's why you can
order physical goods from Amazon's app, but not digital content. It's not
about enriching the core app experience; if it were, you could buy a video
from the Amazon app, which doesn't enrich the core app experience of that app
(you watch videos in the Prime Video app, which is separate).

~~~
tsimionescu
So are Instagram ads not 'digital content'?

~~~
toast0
Does FB let you buy Instagram ads from in the app?

~~~
unreal37
Yes.

------
thesis
Psh, screw Apple. They made us remove the .com from anything that said
domain.com because it would help users recognize that we have a site that
allows purchasing.

We complied of course. :(

~~~
liability
Apple apologists frequently claim the walled garden is meant to keep bad guys
out, but this seems a clear cut instance of the garden's wall being used to
keep people in.

~~~
noizejoy
The Berlin Wall was also marketed by the old DDR government as keeping the bad
guys out, when in reality it was to keep their own citizens from fleeing to
the west.

“Mr. Cook - tear down this wall!” :-)

~~~
wruza
Unless you cannot just go buy any phone or tablet you like, this may be
considered an insult to all these families who were split by that wall. How on
earth do these analogies cross some minds.

~~~
unreal37
Personally not a fan of people who are offended on behalf of "others".

~~~
wruza
Then you must be not a fan of android users or store abusers who "take care
for freedom" of those who are comfortable with apple.

------
lacker
Facebook and Apple negotiate a revenue sharing agreement that covers all sorts
of things, like importantly revenue from apps that are installed via Facebook
ads. The 30% take-it-or-leave-it deal only applies to the little guys; once
you get big you have a custom negotiation.

~~~
millstone
No, there's no sweetheart deals. The 30% is applied very consistently to alls
apps, big or small. YouTube Red, Spotify, Netflix, Epic are examples of large
apps that are/were affected by the 30% cut.

~~~
ccktlmazeltov
Makes you think, why aren't more players trying to get in the phone space just
to disrupt that shit. Google did with Android, I think Mozilla and Facebook
had a mozillephone and facebookphone at some point as well no?

~~~
bsaul
My bet is that the market is now ripe for another mobile platform. The problem
is you don't spawn something like out of thin air, and many big names have
failed in the past (amazon, intel with tizen, firefox, ubuntu, microsoft,
etc..)

Still, now that mobile hardware comes close to being commoditized i think
there's hope, maybe from an unexpected place (like the open source community ?
one can dream..)

~~~
t-
A 3rd platform will likely come from Huawei. They have the resources and the
incentives.

~~~
bsaul
I don’t think anything coming from china will replace apple and google in the
west. The focus is on privacy and openness, and china companies clearly don’t
qualify.

~~~
t-
I agree, I don't think they'll gain much traction in the west. However,
they'll still have access to, and be competitive in, the massive markets of
China (of course), south east Asia, Africa, and Latin America. Combined that's
over 3.5B+ people.

------
jpollock
It's about the money flow. If the money flows from the User to the Developer,
Apple wants a cut as a middleman.

The argument is that the store owner brought the customer to the seller, so
they should get a cut - and it shouldn't be possible for the seller to avoid
that cut by selling direct.

Ads have money flowing from the Advertiser -> Developer. Apple isn't involved
in that relationship, and didn't bring the customer (the Advertiser) to the
seller.

~~~
XCSme
> The argument is that the store owner brought the customer to the seller

One problem is that Apple does not allow developers to bring customers
directly. You always have to go through the Apple Store to install an app on
iOS. So, even if you bring your own customers, you have to bring them through
the iOS Store.

~~~
pbalau
The "store owner" in this case is Apple.

~~~
XCSme
Sorry, that was a typo, I meant developers.

------
awake
I love this question. It’s plausible enough to imagine Apple charging for ads.
But the implications are huge. Imagine every hardware platform charging for
transactions made on that platform. It would be like landlords getting a flat
percentage of your income on top of an annual fee.

~~~
plexicle
It would instantly tank a lot of huge apps/industries. Especially ones with
razor thin margins already.

Consider stock trading apps/fees, for one random example at the top of my
head.

------
Andrew_nenakhov
It is pretty clear that Apple is supposed to take money for functionality
provided by an app. If you get benefit outside of it (like with Uber,
physically transporing you), you may have your own processing service. It is
also clear that if you can enable some functionality from outside the app, you
can't link to non-Apple payment services from within the app nor you can't
mention enhancements. If users somehow discover them on your website, it seems
to be ok.

However, with some types of apps the lines are more vague. Say, we have an
email client, which works over IMAP, and can work with any email account. And
suppose we provide free accounts and 1 GB of space for free, and 10 GB for $1.
Naturally, when user gets to 80% of his quota, we'll send him an _email_ ,
which will be displayed _within an app_ and will link to our website
suggesting do a non-Apple payment.

Common sense says that this should be allowed, but I'd bet that apple
moderators won't allow it.

~~~
fakedang
Can Apple actually stop developers from sending a payment email to end-users?
Would that even be legal, especially if the web-client is a cross-platform
solution available on PC, mobile, etc?

That would be significant overreach, ripe for legal action, imo.

------
ideamotor
Bingo bingo bingo. This is a major reason why the App Store’s rules are so
insidious. What companies are we just not seeing because of this rule? This
rule practically forces B2C software companies to have free ad-supported Apps.
Pernicious and economy manipulating.

------
newbie578
This is a phenomenal question! I would love if someone could provide a
concrete answer.

I also tried to find out more about it, during the last year since I am making
a mobile app which would also sell users the ability to buy ads just like
Facebook does, and I spent DAYS trying to find any sort of information
regarding it.

There was none, no one speaks about it, like it is buried deep down, if you
were to apply Apple's arbitary rules then you would expect that Facebook also
pays the 30% mafia tax, but somehow I doubt it, since that amount would just
be enormous.

I'm honestly excited and curious to follow this thread and see what the
results are going to be.

------
m_crowcroft
I can't imagine Apple is getting a cut of any FB ad revenue (or not anything
meaningful).

To take the thought a bit further though, FB also has an ads manager app [1]
which ad buyers can purchase ads through (pretty much no one uses this app to
be fair). No payment ever goes through Apple so I can't imagine they get a cut
from sales there either.

[1] [https://www.facebook.com/business/news/ads-manager-
app](https://www.facebook.com/business/news/ads-manager-app)

------
MarcellusDrum
Definitely won't happen, but makes me wonder:

If Facebook stopped all their applications (Facebook, Instagram, Whatsapp)
from working on iOS, who would lose more? Will most people start using other
social media platforms more, or will they buy Android devices?

~~~
criddell
I think iOS users could always use FB in the browser.

I can't imagine any ad supported business ignoring iOS users. The demographic
is too lucrative.

~~~
lloyddobbler
As someone who's marketed consumer apps to iOS users (with in-app purchases) -
you speak the truth.

One freemium iOS app I worked on did nearly 5X the revenue compared to its
Android counterpart (others were at varied-but-similar multiples). I imagine
the ad-supported business would reflect the same - the iOS audience is just
too lucrative for advertisers to ignore.

 _edit to adjust multiple. I went back and looked it up._

------
JMTQp8lwXL
The better question is: Why isn't Apple charging? Because Facebook's users
have migrated to mobile over the years. Facebook's users aren't advertisers
(per se, most people have a FB account), but surely some of Facebook's ad
sales are done via iOS.

~~~
unreal37
Because creating an ad isn't a transaction, for one. It costs nothing to
create an ad.

I get billed at the end of the month based on clicks or views, and Apple has
nothing to do with that. The ads might not even show on iOS.

------
spocklivelong
It does not get any revenue from Ads. That is the reason why iOS 14 is making
it very hard for Apps to make any money outside of the going through the App
store (30% cut). This is brilliant from Apple because, it hits 2 birds with 1
stone - Win for consumer from privacy standpoint, Win as a business since it
forces a lot of apps to be converted to paid apps, which will flow more $$ to
Apple.

------
baxtr
From what I understand: The in-app experience is not changed for me as a user.
It doesn’t make my standard app a _better app_. An ad is consumed by other
people on many other devices including browsers on a desktop. So I think it’s
very reasonable it’s not handled like an in-app purchase. It’s more like a
purchase of a physical item in the amazon app.

------
coryfklein
Everyone clamoring "ads don't improve the in-app experience" are looking at
the wrong _user_. Obviously Apple has no grounds to charge Facebook when a
user sees an ad and/or clicks on it. Instead you need to look at the person
_spending the money_ , which is the marketer.

Facebook clearly saw an opportunity to improve marketers' experiences _in the
app_ by allowing them to make ad buys from _within the app_. A marketer could
certainly log on to their desktop and create an ad buy there, but their
experience on the Facebook app is improved by being able to buy ads while on
the couch or travelling. Facebook is improving their in-app experience by
offering something for sale in the app.

How does that not warrant a 30% cut to Apple?

------
d0100
How does Apple differentiate sales from a browser-app and an app-app?

~~~
sjwright
The differentiation: was the app was acquired through the App Store?

~~~
d0100
What I mean is, wouldn't any transaction within a browser be "in-app"?

~~~
sjwright
Do you mean if I download Chrome for iOS and use it to purchase a Netflix
subscription through their website? I’m quite sure Apple has a general purpose
web browser exception for a number of store rules, though I don’t know if that
is explicitly documented.

------
z3t4
I wonder when Facebook and Google will stop shooting themselves. They are in
the same boat as they are web 2.0. If they manage to kill the web Google and
Facebook will die.

~~~
foepys
In some parts of the world Facebook is _the internet_ for many. Facebook
strategically made deals with ISPs to remove Facebook from datacaps and give
priority access.

In India Facebook even sold Facebook-only internet access through a large
mobile provider until the Indian government stopped them for data neutrality
reasons and rightfully so. [1]

Look at the Facebook Zero project that is targeting many third-world
countries, the disguised as charity to help those countries gain wide-spread
internet access. [2]

1:
[https://www.theguardian.com/technology/2017/jul/27/facebook-...](https://www.theguardian.com/technology/2017/jul/27/facebook-
free-basics-developing-markets)

2:
[https://en.wikipedia.org/wiki/Facebook_Zero](https://en.wikipedia.org/wiki/Facebook_Zero)

------
polyomino
Apple's app ecosystem was built on privacy erosion. They should pay out
reparations to users if they want to keep their own app store.

------
joking
I'm curious that in all these conversations Miguel de Icaza made an
appearance, and even more curious on how it's on the side of apple, it almost
seem that he is on the apple payroll!

Not that I have anything wrong with that, but for a long time open source
evangelist and currently working for microsoft, it seems notable.

------
plumX
Whenever I recharge my PokerStars account from inside the app, Apple also
doesn't take 30%, does it? It would be a massive loss for the gaming company,
I'm sure there's a deal worked out in that case too. And I'm pretty sure a
non-disclosure agreement is in place in both of these cases.

------
mythz
"Free with advertising" is tenet of Apple's App Store policy, i.e. Royalty
Free for everyone:

[https://www.apple.com/ios/app-store/principles-
practices/](https://www.apple.com/ios/app-store/principles-practices/)

------
darkwater
Totally unrelated and a bit of trolling but, looking at his constant presence
in this Apple Store twitter threads: is Miguel De Icaza trying to get a
position at Apple? Back in the Gnome/Mono days he did almost the same with
Microsoft and in the end he went there...

------
cricalix
A related tangent - ever notice that if you go to make a donation to a
fundraiser, the iOS app kicks you out to a web page? It would be a better
experience if it was in-app, but I have to wonder if Apple consider that to be
an in-app purchase...

------
gitpusher
Does Apple actually claim that its "rules are [en]forced evenly w/o
exception", or is it merely implied by their (carefully crafted) public
statements?

~~~
goodluckchuck
The importance isn’t that the rules aren’t enforced evenly / fairly, but that
the rules are only enforced against small companies. Enforcing the rules
against Facebook and Amazon would be competitive. Enforcing the rules only
against companies that are too small to compete with Apple is anti-
competitive. We don’t see a suit from Facebook/Amazon, because they are also
beneficiaries of Apple’s illegal conduct. I wasn’t convinced until I saw this,
but this is _strong_ evidence for Epic’s case.

------
baybal2
Tencent has famously strongarmed Apple into waving fees, and Apple Pay
requirement for them under a threat that they will pull Wechat from the App
Store

------
thehappypm
Of course they don’t.

Ads are distinctly different from direct commerce. Good luck computing 30% of
the value of an ad or a product placement.

------
perryizgr8
No, because Facebook is a member of the Tres Commas club. Apple cannot bully
them.

------
afrojack123
Does Amazon pay Apple 30% fo revenue derived from sales made within its iOS
app?

------
aerovistae
I hope this gets widely shared, this is important.

------
javieranton
I want to thank Apple for offering me free marketing with its app store. But
then I submit an update, and surely they come with some far fetched reasoning
requiring me to change my app. The latest one, I had to remove the following
question from FAQs :"Does this app work on Android and iOS? Yes". That's it,
can't even mention Android. I consider this too much. It would make sense if
Apple had developed MY app, but they haven't. I have put into it several man
months and now they get to dictate what I can say in the app. We need an apps
strike

------
tistoon
Bingo! A trillion dollars question :)

------
ProAm
No, they do not.

------
madhadron
No.

------
soulchild37
Lol no

------
3327
Add to exhibit B. sounds like the deal of the century.

------
nwellnhof
Simple answer: Apple charges 30% of what _their users_ pay in the app store.
Facebook makes ad revenue from _other unrelated parties_. How could Apple even
try to tax this?

~~~
asdfaoeu
> How could Apple even try to tax this?

Have their own advertising platform which they take a 30% cut and ban any app
that uses a competing platform the same way they do with IAP.

~~~
nwellnhof
But Apple allows ads from other platforms, so the answer to the question is
obviously no.

------
rhacker
Does Apple take 30% of all ad revenue from any app?

If not- please bury before this turns into a 900 comment waste of time thread

~~~
jeeyoungk
This is different because it's talking about _purchasing_ side of things; you
can purchase Facebook ads via the iOS app and Apple has been fairly consistent
about digital purchases on its platform.

~~~
rhacker
They don't take a cut from either Amazon or Etsy purchases. These are also
things that you purchase in the app.

