Apple grants Airbnb three-month concession on App Store tax
Worldwide: Apple has announced it will temporarily waive its 30 per cent tax on revenue generated by companies hosting online events, paid for via App Store transactions on its iPhones or iPads, for the next three months.
The move applies to businesses that have been forced to switch to online-only events due to the Covid-19 pandemic. However, it is also relevant for the likes of Airbnb, Facebook, and class booking app ClassPass, which have expanded into online workout classes and “experiences” throughout lockdown to find new streams of revenue in the wake of the collapse of travel as we know it.
Currently, the App Store takes a significant portion of any payment made through Apple’s online system. While companies selling in person or real-world services are exempt from these fees, digital service providers, such as event and online class hosts, are still required to pay.
Facebook roundly criticised the tech firm for stifling new business after introducing features to allow businesses to sell digital services on its own platform. However, Apple has now confirmed it will allow Facebook to use its own payment service until the end of the year, with the exception of games companies.
In a statement, Facebook said: “Apple has agreed to provide a brief, three-month respite, after which struggling businesses will have to, yet again, pay Apple the full 30 per cent App Store tax.”
Airbnb and ClassPass added to this criticism, with the App Store threatening to remove those companies in July if they refused to comply with the company’s commission demands. It alleges this was due to the pandemic, while Apple claims the programme was pre-planned.
The home-sharing platform launched its ‘Online Experiences’ offering back in April at the early height of the pandemic in America as an extension of its Experiences program that was established in 2016. The company said the initiative would provide a “new way for people to connect, travel virtually and earn income during the Covid-19 crisis”, including concepts such as virtual cooking classes, online dates and training sessions with Olympic athletes, as well as partnerships with TikTok, Broadway and Pride.
Airbnb said that the expansion of its Experiences program was down to the pandemic, though Apple claimed that it was pre-planned.
At the time, Airbnb and ClassPass said they had received “concerning” messages from Apple and have since spoken with congressional lawmakers participating in an antitrust investigation into Apple over its App Store rules.
Other firms cited Apple’s “capricious enforcement” of its commission, which the company itself refuted by claiming that its App Store guidelines, set up in 2010, clearly entitle it to a sizeable portion of online sales revenue, although this was not required when experiences and classes could take place in person.
Apple is also at the centre of a lawsuit with Epic Games, the creator of the popular online video game Fortnite, which lambasted the 30 per cent in-app purchase commission as “exorbitant” and alleged that its rules preventing purchases outside of Apple’s payment system were uncompetitive.
An Apple statement on Friday read: “To ensure every developer can create and grow a successful business, Apple maintains a clear, consistent set of guidelines that apply equally to everyone.”
Twelve companies, including Epic Games, Spotify, and Match Group, parent of Tinder, launched an advocacy group called the coalition for app fairness. The group has called for transparency, oversight, and reforms of the App Store platform.