Apple Taxes Facebook and Social Media Apps with In-App Boost Purchasing Requirement
October 31, 2022 at 11:45 a.m.
Along with iOS and iPadOS 16.1, Apple introduced changes to App Store rules that upset Facebook, Instagram, Twitter, and other social media companies’ business models. Social media portals rely on paid “boosts” to display user-created content to more people. Apple will now take a 30% cut from social media promotions, allowing them only to be sold through the App Store if used on Apple devices, such as the iPhone.
Specifically, the App Store Review Guidelines added the following new rule:
“Digital purchases for content that is experienced or consumed in an app, including buying advertisements to display in the same app (such as sales of “boosts” for posts in a social media app) must use in-app purchase.”
Paid social media promotions enable casual users to advertise their content, gaining more followers. In 2022, Facebook made almost $28 billion in revenue, down from $29 billion in 2021. The company’s quarterly report offers no earnings breakdown, so we’re not sure how much of this comes from boosts. Meta lumps boosts and ads into one category — “Advertising”. Nonetheless, much of Meta’s ad revenue likely derives from non-professional Facebook and Instagram users who boost posts.
Facebook even positions these promotions as a way for casual users and small business owners to promote their websites. For many Facebook and Instagram users, boosts are the way their build their audience and customer base.
It’s important to note that websites earning revenues from advertisers like Google AdSense should refrain from using social media boosts to gain income through artificial engagement. For some time, AdSense would ban users for doing this. Using Facebook boosts to promote an ad-monetized website was considered unfair to advertisers, and sites typically experienced low-quality traffic.
Google Adsense apparently no longer bans users who promote their sites through social media boosts. Publishers should still avoid the practice, as traffic tends to be low quality.
Advertisers want organic traffic, not Facebook users from an offshore click farm. There are serious allegations that Facebook uses offshore firms to engage with boosted posts. That’s how they can guarantee a certain amount of interaction. That’s why people with tens of thousands of Instagram followers have very little engagement with their content.
Those wishing to bypass in-app boost purchases can always use a computer and web browser to make these purchases outside of the App Store. Because so many no longer own computers, making these purchases outside of Apple’s purview is unlikely. The average consumer won’t know the difference. If Meta adds verbiage to encourage off-app purchasing, Apple may deny the update’s release. It’s happened before, and since Apple has over a billion customers, Meta has to follow the Cupertino company’s rules.
Given Meta’s dramatic plunge, Twitter’s new ownership, and the rise of Tik Tok, social media is in a transitional phase. Facebook and Twitter could likely suffer the same fate as MySpace — irrelevance.