Published 14:40 IST, September 26th 2020

Facebook gets 30% reprieve on Apple commission to help struggling businesses

To help financially hit performers earn money, Facebook struck a deal in which Apple agreed to temporarily forgo its cut of revenue from paid events

World News
2 min read

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On September 25, Facebook announced that in a deal that it struck with Apple, the company decided to temporarily halt the 30 percent cut of the total revenue from paid events amid the coronavirus pandemic. This would help the financially hit performers to earn money as the social media platform would be able to give some businesses a reprieve from paying a 30 percent commission. The deal strikes off Apple’s App Store commission for the social media giant for mobile apps offering paid online events, Facebook said in a statement.

According to the UK’s ADVFN stock market report, Apple’s decision comes amid the soaring criticism of its handling the digital marketplace operations despite the coronavirus. The deal, relevant for the rest of the year, will allow Facebook to use its direct transaction systems for the live events that can be processed by the app developers for in-app purchases via a third party. Apple earlier had said in a statement that the 30 percent commission helped the firm to cover the cost of the store services such as user privacy and was similar to what other app marketplaces charge. However, the recent exemption will promote Facebook Live streaming services and the financially struggling businesses can host paid events and performances without having to pay the App Store fee.

Read: Facebook Removes Fake Russian Accounts For Inauthentic Behaviour Ahead Of US Polls

Read: Facebook Critics Start Rival, Independent 'oversight Board'

New Insights on Small Businesses and Consumer Use of Digital Tools https://t.co/hL4pe2uvfp
— Facebook Newsroom (@fbnewsroom) September 17, 2020

Game-related streaming excluded

In a statement, Facebook said that Apple, despite initially refusing to exempt the store tax, has recently had a change of mind. Over several years, Facebook CEO Zuckerberg and Apple’s CEO Tim Cook have exchanged differences of opinion and verbal attacks over privacy scandals and business models. A New York Times report sources even confirmed that Zuckerberg urged Facebook users to switch to Android and quit the use of iPhones. However, the new Apple’s exemption of App tax for Facebook has created a milestone as struggling businesses will now be able to download apps without the purchase fee until August 2021, but the videogame companies and other game-related streaming are excluded from the deal.

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— App Store Games (@AppStoreGames) September 18, 2020