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Apple Decides to Waive 30% Cut of Paid Events on Facebook, but Only for 3 Months

By Nicholas Rossolillo – Updated Sep 25, 2020 at 5:15PM

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It's part of a widening dispute developers are having with Apple's distribution policies.

After weeks of verbal back-and-forth, Apple (AAPL -4.91%) has agreed to waive its 30% take of paid events hosted on Facebook (META -3.67%). In an effort to help businesses adapt to the times, Facebook had already said it wouldn't charge its own fees until the summer of 2021. And earlier in September, Apple had blocked a message Facebook sent to its event hosts on its app that Apple would take a cut of transactions. 

Apple's decision comes with some caveats, though. For one, the suspension of its 30% cut only lasts through the end of 2020. It is also excluding paid events from video-game companies, saying they don't apply because video games aren't affected by the pandemic, and they've always been digital-based businesses.  

A young woman laying on the floor while using a smartphone.

Image source: Getty Images.

A growing number of developers sharpening pitchforks

Facebook's feud with Apple isn't an isolated instance. The feud also extends to the iOS 14 operating-system update that asks Apple device users to opt-in to apps able to track their information for ad targeting. Other developers are taking issue with Apple's hefty fee for the ability to distribute applications via the App Store. 

Apple's exclusion of video-game companies from its new fee waiver, for example, may not be by accident. Fortnite developer and Tencent (TCEHY -4.25%)-backed Epic Games is locked in a legal battle with Apple over the 30% fee. The rub for many other developers and app distributors is that the mobile world is dominated by Apple and Alphabet's (GOOGL -2.63%) (GOOG -2.63%) Android mobile-operating system -- both of which take 30% off the top of purchases via their respective app stores. Apple calls its App Store "a great opportunity" for software developers and businesses to reach a digital audience in the hundreds of millions. Facebook's Mark Zuckerberg and other execs call it a monopoly, and the one-third haircut developers and businesses take on their Apple and Android sales would seem to support the argument.  

Don't get me wrong, Apple and Android deserve a cut from sales on their platform. That's just how retail works. But such a large piece of the pie? And, interestingly, both companies in the duopoly charge exactly the same percentage. Apple has at least waived its 30% fee for the sake of small businesses for a few months but plans on re-instituting its take rate in 2021. It likes to play high-and-mighty, but Apple could soon find itself under the same antitrust scrutiny that its tech titan peers -- including Facebook and Alphabet -- are under.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Nicholas Rossolillo owns shares of Alphabet (C shares), Apple, Facebook, and Tencent Holdings. His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Apple, Facebook, and Tencent Holdings. The Motley Fool has a disclosure policy.

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Apple Inc. Stock Quote
Apple Inc.
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Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
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Alphabet Inc. Stock Quote
Alphabet Inc.
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Tencent Holdings Limited Stock Quote
Tencent Holdings Limited
$34.27 (-4.25%) $-1.52
Alphabet Inc. Stock Quote
Alphabet Inc.
$98.09 (-2.63%) $-2.65

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