- Apple's updated App Store rules give it 30% of in-app purchases for social media post "boosts."
- The rule essentially allows Apple to tax some advertising in apps like Facebook and Instagram.
Meta is not happy with Apple's latest update to its App Store guidelines around in-app purchases.
The updated rule requires iOS app developers to use Apple's system of in-app purchases for post "boosts" — advertisements that show up in the same app they're purchased on — in social media apps. That means Apple gets 30% of the in-app purchases in Meta-owned apps like Facebook or Instagram when people use the app to pay to boost their posts and profiles to a wider audience.
"Apple continues to evolve its policies to grow their own business while undercutting others in the digital economy," a Meta spokesperson told Insider in a statement. "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."
During the Epic v. Apple trial last May, Phil Schiller, who is responsible for leading the App Store, testified that Apple never took cuts of iOS developer's advertising revenue.
An Apple spokesperson told Insider that, "for many years," the guidelines for the App Store "have been clear that the sale of digital goods and services within an app must use In-App Purchase."
Boosting is a digital service, the spokesperson said, so it requires in-app purchase.
"This has always been the case and there are many examples of apps that do it successfully," the spokesperson said.
Twitter and TikTok are other apps who use in-app purchase for boosts.
The Verge's Alex Heath reported earlier this week that, based on his conversations with employees at Meta, the App Store update isn't anticipated to have too big of an impact on Meta's revenue, but "there is concern about the precedent set and that Apple will eventually require the same rule for Meta's standalone ads manager app."
Eric Seufert, an ad industry analyst, told Heath that people who buy boosts in their social media apps are going to be more affected by the updated App Store policies because they will have to pay more for the same reach they had before.
In Meta's earning call on Wednesday, Meta CEO Mark Zuckerberg acknowledged some of Apple's recent changes, including its latest App Store policy language around boosted posts, saying they are "obviously big risks" that Meta "see as issues."
Zuckerberg also talked about competition and "ads challenges," that he said are "especially coming from Apple."
Meta experienced a 4% revenue decline in the third quarter of this year, continuing a string of disappointing quarterly earnings. On an analyst call, it told investors the company plans to continue spending even more next year, despite losing money while Zuckerberg continues his quest to build the metaverse.