By Rachel Lerman
Facebook on Friday called out Apple for the fees it imposes through its App Store, just a day after Fortnite maker Epic Games filed a suit against the iPhone maker for the same practice.
Facebook announced paid live events for businesses on Friday, a feature that will allow businesses to host virtual events through the social media app, directly charging participants. It said in a news release it asked Apple to reduce the 30 percent fee it takes from purchases made through apps downloaded from its App Store.
Apple refused, Facebook said.
"We approached Apple about this policy and asked them to reduce this fee for businesses struggling during covid-19," Fidji Simo, head of the Facebook App, said on a call with reporters Friday. "And unfortunately they dismissed our request."
Apple did not immediately respond to a request for comment. Critics have alleged the App Store fees are an example of Apple's dominant place in the market and have called them out for anticompetitive behavior.
Facebook is also facing antitrust probes for its dominance in the social media and online advertising industries. The company collects fees from small businesses for selling products using its tools, though it has waived those fees through the end of October this year.
Simo sidestepped a question about Facebook supporting Epic and making an antitrust point about Apple, instead focusing on helping small businesses during the pandemic.
"What we are pushing on right now is making sure all tech companies that can afford to do so join us in supporting small businesses," she said.
Lawmakers focused in on Apple's fee structure when questioning Apple CEO Tim Cook last month during a landmark antitrust hearing focusing on tech giants. Congressman Jerrold Nadler, D-N.Y., accused Cook of profiteering as the novel coronavirus spread around the world by forcing commissions on companies that have had to switch to digital models during a pandemic that has forced much of the business world online.
Cook denied that accusation. "We would never do that," Cook said.
Apple does not impose its 30 percent fee on real-world goods, such as items shipped from Amazon or cars ordered by Apple. But small businesses have switched to virtual conferences and events during the pandemic, which are subject to the fees.
Apple has faced growing backlash about its payment practices in recent months, including from Epic, Spotify and lawmakers in Congress.
Epic's lawsuit against Apple alleges the company has become a "behemoth seeking to control markets, block competition, and stifle innovation." Epic introduced a feature in the Fortnite app earlier this week that would have given people discounts for buying game currencies directly through Epic, rather than through Apple's payment system. In response, Apple removed the app from its store and Epic sued.
Google also removed the app, and Epic sued it as well. But Google has less of a hold on apps on its Android system, and the Fortnite app can still be downloaded directly from the Epic website.
Facebook said Android users will be able to use Facebook Pay for events and businesses will receive all the money.
Facebook said it would not take fees for these events for "at least the next year." The company plans to showcase the fees in the iOS app with a label that reads, "Apple takes 30% of this purchase."
The feature, along with the label, is still under review by Apple. Simo said Facebook won't know for a few days if Apple will approve the wording.
"We think that this is not about pushing people to go and use a different form of payment, which is more against Apple's rules, but it's really about transparency," she said.
The Washington Post