Apple's new App Store rules on 'boosted ads' provoke Facebook again

Apple’s new App Store rules on ‘boosted ads’ provoke Facebook again

Meta Platforms CEO Mark Zuckerberg speaks at Georgetown University in Washington on October 17, 2019.

Andrew Caballero-Reynolds | AFP | Getty Images

Apple recently updated its App Store guidelines with changes that, again, impact Facebook’s advertising business.

The new rule, introduced on Monday, states that companies like Metawho owns Facebook and Instagram, may offer apps to buy and manage ad campaigns in dedicated apps without using Apple’s payment system, but is considering buying an ad in a social media app as a digital purchase, from which Apple takes a 30% cut.

Meta was unhappy with the change. A spokesperson for Meta told CNBC, “Apple continues to evolve policies to grow its own business while undermining others in the digital economy.”

The episode is the latest skirmish from companies like Meta who believe Apple has too much power over mobile distribution and the ever-expanding and changing rules of Apple’s App Store, which is the only way to install apps on an iPhone.

Meta and Apple have been battling it out for years, but the rivalry intensified recently after Apple introduced app tracking transparency to the iPhone operating system last year. The privacy feature allows users to opt out of offering app developers like Meta a unique device identifier that can be used to track ad performance. Meta says the switch could cost it $10 billion this year.

Meta and Apple also look set to compete in the world of consumer hardware, after Meta released the Quest Pro headset and Apple has been developing a competing VR headset for years that could launch next year.

Apple told CNBC that even before the new guideline, the company considered social incentives the type of digital purchase that should use Apple’s in-app purchases, and that the rule was more of a clarification than a new restriction.

“For many years now, App Store guidelines have made it clear that the sale of digital goods and services within an app must use in-app purchase,” an Apple spokesperson told CNBC. “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 necessary. It has always been the cases and there are many examples of applications that do this successfully.”

This individual restriction has long been a sticking point, and Meta, back when it was still called Facebook, negotiated with Apple over social media boosts and whether they would fall under the digital buying rules. of Apple, according to the Wall Street Journal.

Boost features are offered by several social media companies. But most, like Twitter, are already using Apple’s in-app purchase mechanism which lists boosted posts for $9.99 on the Apple App Store. TikTok also sells coins, or currency used to promote posts, through in-app purchases.

For Meta, he thinks Apple’s recent clarification crosses a line by taking a portion of ad revenue, not just app sales. Meta points to previous statements by Apple executives, some made as part of Epic Games’ trial over App Store rules, where he said he didn’t take a cut from ads.

“Apple previously said it doesn’t take part in ad revenue from developers and has apparently changed its mind. We remain committed to providing easy ways for small businesses to serve ads and grow their business on our apps,” Meta’s spokesperson told CNBC.

Apple does not ask for a share of every ad served through the Facebook or Instagram apps. But Meta clearly feels targeted by Apple’s growing power over its platforms and fears the company might claim it deserves a share of Meta’s total ad sales through its ad management app, according to The Verge. , which first reported Meta’s complaint.

It is unclear how big the boost market is. Most major advertisers use dedicated portals or apps to buy ads. Eric Seufert, an advertising industry watcher and founder of Mobile Dev Memo, wrote on Monday that he suspects this is a “negligible proportion of revenue” from social media companies.

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