Comment by spenvo | Hacker News Reader

Comment by spenvo | Hacker News Reader

I submitted with a hesitant title because I'd genuinely love to know, and I'm surprised there isn't more concrete info on this that's readily available. My strong suspicion is that they don't, and 9to5mac editor has chimed in on twitter saying: "Definitely feels muddy, but think Apple is probably considering FB ads as part of the 'outside goods and services' category. Guideline 3.1.5a makes apps use direct payment for those".

If that explanation is true ^, then it's pretty rich, because Apple recently aimed to get 30% of virtual experiences offered through Airbnb. How would those not be considered "outside goods and services" when they involve people outside the app providing goods and services? [0] Others are saying Apple doesn't see it as an "in app purchase"; however, I can click "Place Order" for an ad in the iOS app... I'd call that an in-app purchase! Can all companies let you buy digital stuff within the app with non-Apple payments or in a bill-you-later manner? Just ads?

Almost certainly there have been behind-closed-doors discussions on this, as the line has been arbitrarily drawn (either way) to include/exclude this massive company from the 30% tax. Indies don't have the same clarity on the rules; for example, Marco Arment's app Overcast sells ads, but doesn't complete transactions in the app because he was worried he'd need to give up 30%. Like with Apple's quiet program that let Amazon and a couple other token companies get a separate deal on content-app rules [1]: how can small companies on the store know when to press Apple on some rules and not on others (without retaining lawyers)?

It's just baffling because Facebook has recently whipped up quite a stir [2] around Apple requiring 30% of creator revenue, yet none of the articles mention this point about Facebook ads getting/not-getting a 30% tax for (probably the better part of) the past decade ... their bread and butter!

Furthermore, Facebook is whining about Apple making IDFA tracking opt-in on iOS, yet this company has benefited HUGELY from the fact Apple didn't do that from the start AND somehow decided not to charge 30% on its ad buys on mobile.

[0] - https://www.nytimes.com/2020/07/28/technology/apple-app-stor...

[1] - https://stratechery.com/2020/apple-amazon-and-common-enemies...

[2]- https://www.google.com/search?biw=1440&bih=798&tbm=nws&ei=RR...

From what I understand: The in-app experience is not changed for me as a user. It doesn’t make my standard app a better app. An ad is consumed by other people on many other devices including browsers on a desktop. So I think it’s very reasonable it’s not handled like an in-app purchase. It’s more like a purchase of a physical item in the amazon app.

Ads are a monetization method. I pay a company by consuming ads in their app. So this is definitely something Apple should charge for: it circumvents normal in-app payments.

So is ordering physical goods with the amazon app. As I outlined: ads don’t improve my in-app experience. They rather ruin other people’s experience somewhere else :-)

Certainly it seems reasonable to me that Apple can have whatever business model they want. They want to charge for A and not B, so be it. They aren't the IRS or something.

I think the above comment was more about Facebook being somewhat hypocritical in complaining recently about the one time they do have to pay, despite the fact that in most of their business they don't.

Thanks, I like this breakdown. It was why it was a big deal last week when Apple was trying to get 30% of WordPress hosting fees and then backed down and apologized.

Where it all falls apart: Apple recently targeted 30% of Airbnb's (and ClassPass') virtual experiences revenue. These experiences do not make the app itself better (others were saying here these are done via Zoom). It's a transaction to set up people performing for others (not a purely digital good) in another app like Zoom. It doesn't really change/improve the Airbnb app. ... But Apple aims to treat it as an in-app-purchase...

Unlike with the Wordpress controversy, Apple has not backed down or apologized to ClassPass/Airbnb, demanding both still comply with the 30% rule by year's end.

> as a user

As a user, are you buying ad placements on other people's news feeds? If so, I'd be very confused why you would continue to spend money on it (via your iPhone) if it doesn't change your experience as a user. I'd expect you to at least see some change, hopefully in the form of funds in your own paycheck.

Is there something special about users that buy ads that means Apple can't get a cut of their purchases, or that we don't consider them Facebook "users"?

A virtual experience happens entirely in the Airbnb app right?

Eh, I guess? It involves people essentially performing for each other in their own physical spaces. It's not a purely digital good like ads though.

On the other hand, you can buy a Facebook ad in its iOS Ads Manager app that only targets iOS devices, right?

All of this is to say Apple has arbitrarily picked winner and loser categories of digital app businesses. Meanwhile it sticks to the line that the store is an even playing field. I'd love it if it were!

I think you just solved a conundrum I was having thinking about this very question -- a video class that you watch in an app is in a sense a purely in-app digital good, and Apple appears to have recently been getting super-aggressive about interpreting it that way. But "not a purely digital good" is a great delineation, and one that Apple should probably be making.

(I'm not arguing that Apple's 30% cut requirement for even purely digital goods is appropriate; I think Ben Thompson's recent suggestion of a difference between goods with marginal costs vs. zero-marginal costs goods would be a better starting point, if there were a way to express it simply. Of course, a better suggestion might just be for Apple to allow developers to integrate their own in-app purchase systems for goods and services that aren't explicitly tied to the Apple ecosystem and use non-Apple infrastructure for delivery -- not just video classes but Netflix subscriptions, Kindle books, and so on.)

Is it really arbitrary, though? The decisions all seem to have reasons, mainly "what is best for Apple's bottom line"

It's also not surprising that companies the size of Facebook, and others, have negotiated terms with Apple that smaller organisation will find difficult to match.

Perhaps what the smaller organisations and some developers need is to fund a lawyery folk to advocate / negotiate collectively on their behalf?

Edit: improved grammar by removing a typo and changing a word or two.

The lawyers aren't the reason those negotiations are successful.

Billions of users are the reason those negotiations are successful. Apple will be in a pickle if you can't get Facebook on an iPhone. Apple doesn't give two figs if someone can't get some shitty startup's app on an iPhone.

The ugly truth Apple doesn't want aired out in the open is that if not for apps like Twitter and Facebook, its own platform (iOS) is suddenly alot less appealing.

This in addition to the question of, what is 30% of all revenue FB makes via ad purchases in its iOS app? I don't think this number is published but easy to think it is in the billions (what is annual FB ad revenue? $60 billion something like that? How much of that is ad agencies (or ad buyers) managing ads via the iOS app?)

If Apple were to attempt to tax that... they'd suddenly give Facebook a several-billion-dollar reason to push the market to create a third mobile device platform and have it overtake iOS.

Well, if the FB app wasn't allowed on iOS any more, wouldn't FB do its level best to create a web experience (via iOS Safari) that's "good enough" instead?

Apple owns the mobile-web Safari experience and penalises PWAs for exactly this reason.

It's not about not allowing the FB app, it'd be about forcing those purchases to incur the 30% fee; no way FB would give up that much money.

Facebook has a native browser app. I think that is a pretty damn big economic difference as otherwise they wouldn't bother with a native app. That would be bad for the apple Brand to give Android an exclusive like that.

And? It's not illegal for a company to calibrate its business model to improve the bottom line. On the contrary in many cases they are legally forced to. Obviously while respecting other laws.

And they claimed otherwise.

I did several and they were all through Zoom. The transaction was only through the Airbnb website.

I just solved it: If Facebook Ads (which are obviously bought for an in—app experience for others), I will now introduce a different pricing model to my app: you pay for a subscription of another person. And another person pays for yours. This way, the IAP clearly doesn’t result in your own app experience and hence, should be exempt from the 30% cut.

Or how about let users buy gift card or apps local currency(trading app). Which could then be used for anything within the app or can be transferred. That way it's no longer a purchase of digital good buy exchange of currency

> That way it's no longer a purchase of digital good buy exchange of currency

Just be really careful, there’s tons of FinCen and KYC/AML laws that might cover what you’re doing if you go this route.

I would think in that setup you'd have to have it such that you subscribing for another person would not guarantee that another person would subscribe for you. In other words, some people subscribing for others would not receive a subscription themselves, and some people _not_ subscribing for others would still receive a subscription paid for by some other user(s). Basically, you'd pay for a subscription and the benefits would go to some random user that is not you.

Games should ask users to chip in to their Facebook marketing budgets. Cost offset is revenue earned!

You've asked this around different places, and it's been answered. Those ads are not digital purchases made by users. They're ads. Please edit your posts and point out that this has been answered now and you understand that ads are not the same thing. But of course, if you want to keep bashing Apple and muddy the waters, continue on.

Also, Facebook is going to find their ads are less effective in the next release of iOS, as they won't be able to track people as easily.

> Please edit your posts and point out that this has been answered now and you understand that ads are not the same thing.

This sentence might very well be based on good intentions and a passion for discourse clarity.

It also feels extremely paternalistic and condescending to tell someone to edit in ones own viewpoint as their own and even demand a faux acknowledgement of personal progression. Almost like in a play that depicts a medieval trial.

I know it probably wasn't meant that way and we're certainly all frustrated by the repetitive parts of the conversation, but the on-topic sentences would've been great on their own.

Owners of the Big Soviet Encyclopedia received replacement pages and were instructed to update their copies with scissors and glue to remove the article about Beria after he fell from power. Gives me the same vibes.

I can digitally purchase an ad. I am a user. I don't have to own a business to buy an ad. So... ads and digital purchases made by users are one and the same, as far as I'm concerned

(Also, I haven't "asked this around several times", and I won't edit my posts, you goofball!)

How? I was never offered to purchase an ad as user.

Create a Facebook page and download the Ads Manager app

Like creating a Netflix account on Netflix.com and adding my payment credentials there (or Spotify), and then consuming it on the iPhone w/o apple getting any cut?

Using that analogy, it would be like if Netflix let you sign up in its app (purchase the subscription without leaving the app). (The FB ads manager app let's you "place" ad orders on iOS.) Instead, Netflix doesn't let you make that sign up transaction in-app. In fact, it doesn't even link out to a web site where you can, because Apple limits Netflix's speech in that regard.

Ok, got it. So it’s like purchasing physical items in the amazon app? Which makes sense to me since ads don’t improve the in-app experience for me as a user. They don’t make standard app ==> better app. Ads are “consumed” by many other people, on many devices, aren’t they?

Same for Wordpress, right? If I'm purchasing a hosting platform for my website, that doesn't make the Wordpress app any better, and it doesn't change the content I have inside the app -- it's purely a downstream change that affects my business, the same as if I bought an ad on Facebook.

So shouldn't Wordpress be able to offer hosting transactions in-app without paying 30%?

I don’t know the app, but from your description I’d follow the same reasoning, yes.

Of course selling ads in the app improves the in-app experience, otherwise Facebook wouldn't sell them in the app! Surely some folks prefer to place their add orders on their phone instead of sitting down at their desktop.

The experience is not different than before. You can buy ads or not. They don’t sell the “AI ad manager pro” in the app which manages everything for you. The software remains the same after the purchase.

How are ads "not the same thing"?!? The idea is that Apple takes 30% of whatever you sell via an app available in the App Store. Some sell games, Facebook sells ads. It is actually their core business.

Likely, the real reason why Facebook won't have to pay the 30%, is that it is too big a customer to lose. Facebook is too important for Apple as a customer to have in the App Store. So Apple and Facebook made a deal, which is what you can do if you are big enough...

The fact that a new iOS will reduce the tracking of users by Facebook is not even remotely touching the topic we're discussing here. If Apple has a rule that it can take 30% of every sale made via an app from the App Store, this should be applied to every sale. Everything else smells like Trumpism, where you pay less taxes the richer you are...

‘If Apple has a rule that it can take 30% of every sale made via an app from the App Store, this should be applied to every sale.’

So should Amazon pay 30% to Apple on every sale made via their iOS app? I assume you mean every digital sale.

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