Meta Empowers Small Businesses with Strategies to Navigate Apple’s App Store Fees
Apple’s 30% App Store Cut Under Scrutiny as Developers Seek Alternatives
Meta Platforms Inc. has recently rolled out fresh guidelines tailored specifically for small businesses leveraging Facebook and Instagram for advertising purposes, with the overarching aim of circumventing the fees levied by tech giant Apple Inc.
In its latest guidance released on Thursday, Meta is advising these businesses to opt for purchasing ads via a web browser instead of utilizing the Facebook or Instagram iOS applications. By doing so, these enterprises can sidestep the imposition of a commission by Apple, slated to come into effect this month.
Apple’s revised policy mandates advertisers to utilize its In-App Purchase feature whenever they engage in paid promotion to “boost” social media content, thereby enhancing its visibility. However, this move entails Apple’s imposition of a commission, which can be as high as 30% on app purchases within its iOS ecosystem. Consequently, Meta faces the prospect of relinquishing a portion of its ad revenue to the iPhone maker, underscoring the importance of devising alternative strategies to mitigate the impact of these fees on its business operations.
Apple said Thursday that treating boosts as an In-App Purchase is consistent with its longstanding approach to the App Store. The company said it spent more than a year discussing the boosting policy with Meta, giving them ample time to comply.“We have always required that purchases of digital goods and services within apps must use In-App Purchase,” Apple said in a statement. “Boosting, which allows an individual or organization to pay to increase the reach of a post or profile, is a digital service — so of course In-App Purchase is required. This has always been the case and there are many examples of apps that do it successfully.”
Apple Chief Executive Officer Tim Cook has been a vocal detractor of the privacy practices at Meta, which relies on user data to sell ads. Previous Apple changes have hit Meta in the pocketbook. In 2021, an iOS tweak that limited third-party data collection led to an estimated $10 billion loss in ad revenue for Meta.
The iPhone maker has drawn broader criticism for its policies, with companies like Spotify Technology SA and Fortnite maker Epic Games Inc. saying App Store rules are unfair. The company recently overhauled its approach in Europe to comply with new regional legislation, though those changes have brought further outcry.
Apple’s new policy takes effect in the US first, before rolling out to other countries later this year. The change will also require advertisers to pay for ads upfront when buying them through an iOS app. The change will largely affect Meta’s smaller advertisers, some of whom use boosted posts as their only form of advertising, Meta said.
