Facebook says Apple refused to waive 30% fee on new paid online events feature

Facebook’s CEO Mark Zuckerberg speaks during the F8 Facebook Developers conference on April 30, 2019 in San Jose, California.

Justin Sullivan | Getty Images

Facebook on Friday took a shot at Apple, saying the company will only be able to pay small businesses a portion of sales from a new paid online events feature as a result of the iOS App Store’s policies. 

“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,” said Fidji Simo, the head of the Facebook app in a blog post. “Unfortunately, they dismissed both our requests and SMBs will only be paid 70% of their hard-earned revenue.”

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

Unlike Apple, Google will not take a cut of sales through its Android service. As a result, Facebook said it would make it clear to users in the iOS version of its app that Apple is taking a cut of their sales. 

A screenshot of the iOS version of the feature says “Apple takes 30% of this purchase.” Simo said Facebook is unsure if this label will successfully get through Apple’s review process, but she said it is important for users to know where their money is going. 

“When people are paying $20 for a paid online event and they assume that the $20 is all going to the local business they’re trying to support — when 30% is going to an almost $2 trillion company, that’s relevant information for people to have,” Simo said on a press call. “We felt this was an important thing to call out.”

Facebook’s shot is the latest blow in a long-running feud between the social media company and Apple. Facebook last month warned investors that its revenue could be impacted by an upcoming feature in Apple’s iOS 14 that could make it more difficult for the social media company to target ads to its users. 

Apple’s App Store is the only way to install software on iPhones, and in recent weeks, top app makers have started to revolt against its rules and the 30% cut it takes from payments.

Facebook and Microsoft complained about Apple’s App Store policies earlier this month.

“Apple stands alone as the only general purpose platform to deny consumers from cloud gaming and game subscription services like Xbox Game Pass,” Microsoft said when it announced the September launch of its upcoming game streaming service.

“Unfortunately, we had to remove gameplay functionality entirely in order to get Apple’s approval on the standalone Facebook Gaming app – meaning iOS users have an inferior experience to those using Android,” Facebook chief operating officer Sheryl Sandberg said.

On Thursday, Epic Games decided to test Apple’s rules and introduced a way for gamers to directly pay Epic for features. Apple removed Fortnite from the App Store and Epic Games file a lawsuit against Apple shortly after. Google also removed Fortnite for breaking its Play Store rules, but Android allows users to install third-party app stores, which means people can still install and play Fortnite.

Match Group, makers of Tinder and Hinge, Spotify have also called for a closer look into App Store business practices.

CNBC’s Kif Leswing contributed to this report.

This news is developing. Please check back for updates.

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