Apple recently revised its App Store guidelines, affecting Facebook’s ad business.
The new rule, which went into effect on Monday, states that companies such as Meta, which owns Facebook and Instagram, can offer apps that allow people to buy and manage advertising campaigns in dedicated apps without using Apple’s payment system. However, buying an ad in a social media app is a digital purchase, from which Apple takes a 30% cut.
Meta didn’t like this change. According to a Meta spokesperson, “company continues to evolve its policies to grow its own business while undercutting others in the digital economy.” The episode is the latest clash between companies like Meta, which believe Apple wields too much power over mobile distribution, and the constantly expanding and changing rules of the App Store.
Apple and Meta
Meta and Apple have been at odds for years, but the rivalry has recently heated up following Apple’s introduction of App Tracking Transparency in the iPhone operating system last year. Users can use the privacy feature to refuse to provide app developers like Meta with a unique device ID to track ad performance. According to Meta, the change could cost $10 billion this year. After Meta released the Quest Pro headset, and Apple has been developing a competing VR headset for years, both companies appear poised to compete in the world of consumer hardware.
Apple stated that before the new policy, the company considered social boosts to be the type of digital purchase that required Apple in-app purchases. The rule is more of a clarification than a new restriction.
According to Meta, the company’s recent clarification crosses a line by reducing advertising revenue rather than app sales. Meta refers to previous executive statements, some of which were made as part of the Epic Games trial over App Store rules, stating that it did not take a cut of ad revenue.
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