Home » US business news » Meta criticizes Apple for ‘undercutting others’ with its new ad policy

Meta criticizes Apple for ‘undercutting others’ with its new ad policy

By Nithya Bose in US business news, posted October 26, 2022

Meta has slammed Apple for altering the terms of its App Store, claiming the move means the company can grab a portion of social media advertising revenue.

The Facebook parent said Apple was "undercutting others in the digital economy."

The policy change demands users and advertisers to make an in-app purchase to "boost" postings on apps including TikTok and Meta's Instagram.

Apple charges up to 30 percent commission on in-app purchases, which means that a firm like Meta will lose some of its ad revenue to its huge rival.

Meta said: “Apple previously said it didn’t take a share of developer advertising revenue, and now apparently changed its mind.

“We remain committed to offering small businesses simple ways to run ads and grow their businesses on our apps.”

Apple, which is developing its own advertising business, says using in-app purchases for boosts is simply an extension of its current rules and that other apps already comply.

The company said: “For many years now, the App Store guidelines have been clear that the sale of digital goods and services within an app must use in-app purchase.

“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.”

Other social media platforms that provide the option to promote postings, such as TikTok and Twitter, did not immediately reply to requests for comment.

Apple’s policy says that operate only to allow marketers to purchase ads and manage campaigns across various media are not obligated to give Apple a share.

The firm said “digital purchases for content that is experienced or consumed in an app, including buying advertisements to display in the same app (such as sales of ‘boosts’ for posts in a social media app) must use in-app purchase.”

What this means is that if an influencer pays Instagram to promote a personal post to a wider audience through the iPhone app, Apple will take a cut.

The social networking firms have yet to announce how they would conform to the change.

Social media platforms are already feeling the effects of Apple's latest privacy changes to its iOS platform, which means companies must now seek users' permission to collect data about them.

Need Career Advice? Get employment skills advice at all levels of your career

Meta, which uses similar data to better target ads, estimates that the shift will cost the company $10 billion in revenue this year.

Nonetheless, the boost policy may be the first time Apple receives a direct part of ad revenue.

Apple has previously promoted advertising as a channel through which developers may earn as much money as they want from their users.

Source: Bloomberg

Follow us on YouTube, Twitter, LinkedIn, and Facebook.