Meta Shows Small Businesses New Ways to Bypass Apple's App Store Fees

Meta Platforms Inc. released new guidelines for small businesses that advertise on Facebook and Instagram, aiming to help them get around fees imposed by Apple Inc.

Meta is advising the companies to buy ads through a web browser, rather than on Facebook or Instagram iOS apps, according to guidance released Thursday. That will help them avoid an Apple commission that Meta said would take effect this month.

Apple's new policy requires advertisers to use its In-App Purchase feature whenever they pay to “boost” social media posts — a move that gives the content more exposure. Apple takes a cut of as much as 30% on app purchases in its iOS software, meaning that Meta will lose a portion of its ad revenue to the iPhone maker.

The policy change, first announced by Apple in 2022, ratcheted up tension between the tech giants, which have become two of Silicon Valley's biggest adversaries in recent years. At the time, Meta accused the company of “undercutting others in the digital economy.” Chief Executive Officer Mark Zuckerberg has also frequently criticized Apple for wielding too much control over its App Store.

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.

© 2024 Bloomberg LP

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