Apple declines Facebook's request to help small businesses

To support small businesses, Facebook has decided not to collect any fees from paid online events for at least one year. With web-based transactions, and those done on Android, small businesses get to keep every cent they ring up. In order to keep these businesses from having to pay for transactions conducted over iOS, Facebook asked Apple to waive its 30% cut of in-app payments. Apple refused to do so; as Facebook says, "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, Vice President, Head of Facebook App said, "We went through our usual channels to suggest strongly to them (Apple) to waive their fee or to let us use Facebook Pay -- one of the two -- and they declined. Simo called Apple an important partner and said Facebook relies on Apple’s App Store to distribute its own apps while noting that the company disagrees with Apple’s revenue structure. "Helping small businesses recover from COVID is a critical thing that all tech companies should help with. The reason we’re calling them out here is we hope they join us and end up waving their fees, so that’s really the goal here." Simo says that Facebook is willing to play by Apple's rules even when it doesn't believe in the game that Apple is playing. The executive says, "When developers go circumvent the rules on alternative payment methods, it doesn’t go well."

Apple's 30% cut of in-app payments is being investigated by antitrust regulators in Congress. Like Apple, Google demands a 30% cut of in-app payments made over the Google Play Store. Unlike Apple, Google allows Facebook users to make payments over Android using Facebook Pay. This allows small businesses to keep 100% of the revenue they generate by promoting and offering online events on Android. In addition, while Apple doesn't allow App Store users to sideload apps over third-party app stores, Android users can. This is the difference between the App Store being called a monopoly and the Google Play Store being considered competitive.

Facebook is considering expanding online events to its 100% owned Instagram app and its Rooms videoconferencing feature.