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First Fortnite, now Facebook: Apple takes another jab over its app store

The jab from Facebook came as it rolled out a new set of tools for small businesses, including a "Paid Online Events" feature.
Image: Smartphone Apple, Facebook
A Facebook logo on an Apple iPhone smartphone in London, on Aug. 20, 2018.Jason Alden / Bloomberg via Getty Images file

Facebook is joining the crusade against Apple.

The social media giant on Friday accused Apple of hurting small businesses with its long-standing 30-percent in-app commission fee. The charge comes one day after Epic Games, the maker of the video game giant Fortnite, sued Apple for anticompetitive behavior.

The jab from Facebook came as it rolled out a new set of tools for small businesses, including a "Paid Online Events" feature that allows businesses around the world to charge Facebook users to attend online events, such as exercise classes or wine-tasting courses. For now, Facebook will not charge a fee for using this feature, citing the coronavirus pandemic and its impact on small businesses.

As part of the rollout, Facebook said that Apple wouldn't allow Facebook to process the payments independently for Apple iOS users, meaning some in-app purchases would still be subject to the 30-percent fee.

Google, the maker of the Android operating system, said it would allow Facebook to process payments through its own system and avoid a similar fee.

"We asked Apple to reduce its 30% App Store tax or allow us to offer Facebook Pay so we could absorb all costs for businesses struggling during COVID-19. Unfortunately, they dismissed both our requests and SMBs will only be paid 70% of their hard-earned revenue," Fidji Simo, head of the Facebook App, wrote in a blog post announcing the new features.

An Apple spokesperson did not immediately respond to a request for comment.

The fees that Apple charges for money that flows through its app store have been the source of criticism for years, but ongoing antitrust investigations in the U.S. and Europe have made them a particularly sensitive topic for the iPhone maker.

But until Thursday, most of those battles were between Apple and far smaller companies, with the music streaming service Spotify the biggest company to push back on the arrangement. Now, Apple suddenly faces one of the biggest video game makers in the world and Facebook, one of the few tech companies that can rival Apple in terms of size and resources.

Both Apple and Google have been criticized by developers for the commission fees they charge for certain in-app purchases, which are often as high as 30 percent.

The developers’ primary complaint is that Apple and Google's power over the app marketplace allows them to set an arbitrary tax on developers and advantage their own apps over those of their competitors.

“The problem here isn’t whether 30 percent or 15 percent is 'fair,' but that there is no store or payments-based competition on Apple devices," Matthew Ball, the media strategist and former global head of strategy for Amazon Studios, said of Apple’s policy.

"This means the rates Apple sets, and the policies they enforce, are not determined by the market, but instead just by Apple — one of the most powerful companies in history,” he said.

This week, Epic Games became the first company to take action against Apple and Google over these policies. On Thursday, Epic implemented its own in-app payment system for Fortnite, the massively popular video game, effectively circumventing the 30-percent fees. Apple and Google responded by removing the Fortnite app from their systems entirely.

Epic responded by suing Apple, stating in its lawsuit it was suing "to end Apple's unfair and anti-competitive actions.” Epic has not filed a similar lawsuit against Google.

For Facebook, Friday's dig on Apple also has a personal significance.

For over a decade, the two Silicon Valley giants have sparred with one another over differing policy approaches. Apple's leadership, including Steve Jobs and the current chief executive, Tim Cook, often criticized Facebook for mishandling user data and abusing privacy.

CEO Mark Zuckerberg and other Facebook executives have commended themselves for keeping their product free for users and providing new, free services not just for the average user, but for entrepreneurs. Friday’s charge against Apple was yet another chance to cast themselves as the friend of small businesses.