With the release of iOS 16.1, Apple has updated its App Store policy, asking developers for a 30% cut on “sales of ‘boosts’ for posts in a social media app.” The policy unknowingly or knowingly targets Meta, which owns Facebook and Instagram – two apps that let users pay to boost their posts’ reach.
Meta was certainly not happy when Apple introduced App Tracking Transparency, and now the new rules have made them upset even more. In a statement to Verge, a company spokesperson said, “ Apple continues to evolve its policies to grow their own business while undercutting others in the digital economy. 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.”
It is the first time Apple is directly taxing advertising, even though it says it is not. The company previously stated that it had never asked for a share of an app’s ad revenue. In a statement to The Verge, an Apple spokesperson explains “boosting” as digital goods and services, and he further adds that for years the company has taxed for an in-app purchase of digital goods and services.
Not just Facebook or Instagram but many other apps also allow users boost their posts, profiles, or other content for a specific fee. One can promote their tweet, boost their dating profile or even boost advertorials on marketplace apps. Though it is Meta who owns two of the biggest social media platforms – Facebook and Instagram – and because of recent changes in advertising on Apple devices, the company has lost billions in revenue.
However, the recent changes in the policy will not affect Meta’s earnings largely, as the new rule targets individuals who pay to ‘boosting’ the visibility of their content and not large-scale advertisers. So, it is the end users who are taking the hit, paying more for the same amount of audience.
Though the major concern for the Meta is not this, it is that Apple could tax its ‘Ads Manager’ app, which is still exempted from Apple tax since it does not display ads within the app.
Meta was certainly not happy when Apple introduced App Tracking Transparency, and now the new rules have made them upset even more. In a statement to Verge, a company spokesperson said, “ Apple continues to evolve its policies to grow their own business while undercutting others in the digital economy. 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.”
It is the first time Apple is directly taxing advertising, even though it says it is not. The company previously stated that it had never asked for a share of an app’s ad revenue. In a statement to The Verge, an Apple spokesperson explains “boosting” as digital goods and services, and he further adds that for years the company has taxed for an in-app purchase of digital goods and services.
Not just Facebook or Instagram but many other apps also allow users boost their posts, profiles, or other content for a specific fee. One can promote their tweet, boost their dating profile or even boost advertorials on marketplace apps. Though it is Meta who owns two of the biggest social media platforms – Facebook and Instagram – and because of recent changes in advertising on Apple devices, the company has lost billions in revenue.
However, the recent changes in the policy will not affect Meta’s earnings largely, as the new rule targets individuals who pay to ‘boosting’ the visibility of their content and not large-scale advertisers. So, it is the end users who are taking the hit, paying more for the same amount of audience.
Though the major concern for the Meta is not this, it is that Apple could tax its ‘Ads Manager’ app, which is still exempted from Apple tax since it does not display ads within the app.
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