Facebook attempts to bypass Apple's App Store fee with new Subscriptions payment link

AppleInsider

Facebook is rolling out a new tool designed to help content creators earn money on its platform while sidestepping Apple's customary 30% cut of App Store transactions.

An addition to Facebook's Subscriptions tool, which allows creators to charge fans for content, the new feature is an in-app link that sends users to a website to complete subscription purchases via Facebook Pay.

Using personalized "promotional links" allows content creators to direct fans away from the App Store, where they can keep 100% of subscription proceeds, excluding taxes. Links can be shared through email and text, but they are also ripe for integration on creators' Facebook pages, which appear in Facebook's iOS app.

Facebook is operating in uncharted waters and could find itself running afoul of App Store guidelines which strictly prohibit integration of alternative payment mechanisms. A spokesperson for the social network told The Verge that it believes the strategy has always been allowed on iOS, adding that Apple's native payments system will also be offered for user signups.

While App Store regulations are explicit in their application to apps and digital goods, jurisdiction becomes nebulous when mixing in content creators who directly benefit -- or suffer -- from those rules. Facebook is attempting to remove itself from the equation by not collecting fees on subscriptions (at least not until 2023). The implication is that Apple's commission hurts creators, not the social media giant. It's a refrain Facebook has used in the past to counter other Apple initiatives like a privacy-focused crackdown on ad tracking.

Mark Zuckerberg, Facebook founder and CEO of parent company Meta, reiterated his company's opposition to App Store fees in announcing Subscriptions links on Wednesday.

"As we build for the metaverse, we're focused on unlocking opportunities for creators to make money from their work," Zuckerberg said in a Facebook post. "The 30% fees that Apple takes on transactions make it harder to do that, so we're updating our Subscriptions product so now creators can earn more."

Zuckerberg also announced a bonus structure that will see Facebook pay creators between $5 and $20 for every new subscriber.

The move comes as Apple makes piecemeal concessions to slowly reshape App Store policy. In August, the company reached an agreement to settle a class action lawsuit opposing App Store fees and commissions. The agreement, which is reportedly on the verge of approval, would allow developers to email customers about alternative payment methods. More recently, Apple said it will permit so-called "reader" apps to include an in-app link to set up or manage accounts.

Apple might soon have no choice but to authorize in-app payment alternatives like Facebook's Subscriptions links. In a ruling handed down in the Epic v. Apple lawsuit in September, U.S. District Court Judge Yvonne Gonzalez Rogers ordered Apple to nix "anti-steering" provisions that restrict developers from linking to outside payment methods. Apple in October requested a stay of the decision as it appeals.

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rob53

Facebook will still get charged for being hosted on Apple's servers. Time for Facebook/Meta/garbage to go away anyway. 

viclauyyc

Apple should just ban Facebook for good on iOS. 

For those who still need it, they can still use the browser version. 

iqatedo

If one believes that FB is an essential or even necessary component of one's business model, it is likely time to give it the shove. The notion of Meta succeeding is chilling. Orwell would thrive in these times. (Disclaimer - I do not have a FB account lol.)

Lexicon1

I’m still amazed by the number of tech websites who don’t seem to have either read fully or grasped the ruling of the judge in the Epic vs Apple trial. The removal of the anti-steering rules in the App Store guidelines does NOT mean that Apple won’t get its 30 % commission. In fact the judge ruled that Apple is entitled to compensation for its intellectual property. Anything else would be contrary to intellectual property law. The only difference would be that payment would be done to the third party fully, and then Apple would have to get its 30 % from them after the fact. Whereas today it’s the other way around, which is much easier for Apple as they are the payment processor and only need to pay out the 30 % to the developers. How this will be done in practice, we’ll see. But Apple has anyhow appealed so we’ll see what happens.

gatorguy

Lexicon1 said:

I’m still amazed by the number of tech websites who don’t seem to have either read fully or grasped the ruling of the judge in the Epic vs Apple trial. The removal of the anti-steering rules in the App Store guidelines does NOT mean that Apple won’t get its 30 % commission. In fact the judge ruled that Apple is entitled to compensation for its intellectual property. Anything else would be contrary to intellectual property law. The only difference would be that payment would be done to the third party fully, and then Apple would have to get its 30 % from them after the fact. Whereas today it’s the other way around, which is much easier for Apple as they are the payment processor and only need to pay out the 30 % to the developers. How this will be done in practice, we’ll see. But Apple has anyhow appealed so we’ll see what happens.

Google has proposed how they'll comply with the similar South Korea alternate billing law and AFAICT the same rules would work for Apple too. The effect on revenue will be almost non-existent, but I'll guess in Apple's view it makes the slope more slippery if they give in on any points at all. They'll probably still fight it tooth and nail.
https://developers-kr.googleblog.com/2021/11/enabling-alternative-billing-in-korea-en.html

foregoneconclusion

Netflix, Spotify, and Amazon Kindle already proved that mainstream smartphone users are aware that they have access to the internet to pay for things. The anti-steering provisions have never been a barrier to payment on the web. Anti-steering is just a standard best practice that's used widely throughout the business world. Customers are going to be bombarded with business and marketing communications in their daily life. A single store can't credulously be viewed as the only place where they could be communicated with by a business or seller. 

Appleish

Since Facebook's audience is mainly aging and older people with poor technology knowledge, any payments collected through them should be suspect. 

darkvader

Lexicon1 said:

I’m still amazed by the number of tech websites who don’t seem to have either read fully or grasped the ruling of the judge in the Epic vs Apple trial. The removal of the anti-steering rules in the App Store guidelines does NOT mean that Apple won’t get its 30 % commission. In fact the judge ruled that Apple is entitled to compensation for its intellectual property. Anything else would be contrary to intellectual property law. The only difference would be that payment would be done to the third party fully, and then Apple would have to get its 30 % from them after the fact. Whereas today it’s the other way around, which is much easier for Apple as they are the payment processor and only need to pay out the 30 % to the developers. How this will be done in practice, we’ll see. But Apple has anyhow appealed so we’ll see what happens.

Sure, Jan.  The courts are going to let Apple go after developers for not paying 30% to do ABSOLUTELY NOTHING for them.  That'll happen.  Right.

"Intellectual property" doesn't figure into it AT ALL.  It's basic contract law, you can't have a valid contract without consideration from both sides.  The developer pays a hundred bucks a year, then gets access to get into the app store.  The developer uses Apple to process payments, Apple gets (an extortionate, but whatever) 30% cut.  The developer uses an outside payment system, Apple does no work, and Apple is entitled to and gets exactly nothing.

foregoneconclusion

darkvader said:Sure, Jan.  The courts are going to let Apple go after developers for not paying 30% to do ABSOLUTELY NOTHING for them.  That'll happen.  Right.

"Intellectual property" doesn't figure into it AT ALL.  It's basic contract law, you can't have a valid contract without consideration from both sides.  The developer pays a hundred bucks a year, then gets access to get into the app store.  The developer uses Apple to process payments, Apple gets (an extortionate, but whatever) 30% cut.  The developer uses an outside payment system, Apple does no work, and Apple is entitled to and gets exactly nothing.

FYI...Apple has never charged 30% for payment processing only. Apple's 30% commission includes:

• Payment clearing, fraud protection, indemnity insurance, and dunning
• Local tax enforcement
• Global content distribution network
• DRM

https://www.igeeksblog.com/why-app-store-is-charging-30-percent-commission/

Dogperson

Appleish said:

Since Facebook's audience is mainly aging and older people with poor technology knowledge, any payments collected through them should be suspect. 

Surprised you didn’t throw in race. 

(Been on computers since 70s but never on fecesbook)