What you need to know
- Apple will not charge small businesses its 30% fee for virtual events on the Facebook app.
- It will hold off on collecting its fee until December 31.
- Facebook says that is not enough, as it plans to waive fees until at least August of 2021.
Reported by CNBC, Apple has temporarily reversed its decision to take a 30% cut of transactions from the Facebook app for virtual events that have been booked by small businesses. Last month, Facebook had publicly complained that the company collected 30% of these revenues, saying that it was hurting the small businesses that relied on these virtual events during the pandemic.
"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. While Facebook is waiving fees for paid online events we will make other fees clear in the product."
Apple has now told CNBC that it will temporarily remove its 30% fee for virtual events booked through the Facebook app to allow time for businesses to adapt to becoming more digital. It also said that it only charges these fees for digital events and that Facebook has until the end of the year to enable in-app payments for real-world events, an offering that Apple would not collect a fee for.
"The App Store provides a great business opportunity for all developers, who use it to reach half a billion visitors each week across 175 countries," Apple said in a statement. "To ensure every developer can create and grow a successful business, Apple maintains a clear, consistent set of guidelines that apply equally to everyone."
Facebook shot back at Apple after the announcement, saying that waiving the fees until the end of the year was not long enough, as it already plans to waive its own fees until August of next year. It also pointed out that Apple is still collecting fees for gaming companies, but Apple says that, since gaming companies have always been digital, it does not make sense to waive the fee.
"This is a difficult time for small businesses and creators, which is why we are not collecting any fees from paid online events while communities remain closed for the pandemic," Facebook spokesperson Joe Osborne said in a statement. "Apple has agreed to provide a brief, three-month respite after which struggling businesses will have to, yet again, pay Apple the full 30% App Store tax."
Facebook is one of many companies that are complaining about Apple's App Store fees. The most public is Epic Games, which is currently locked in a legal battle with Apple to offer Fortnite through the App Store without having to pay Apple's fees. Most recently, the company joined the 'Coalition for App Fairness' for its latest dig at Apple.