Meta to shift Apple tax to advertisers on Facebook & Instagram

By revealing that it will soon charge its users Apple's 30% service fee, Meta hopes to capitalize on advertiser dissatisfaction in its legal dispute with the company over in-app purchase costs. This month, advertisers that wish to pay to boost a post on the Facebook or Instagram iOS app will now be invoiced through Apple, where this additional price will now be charged, according to a statement made by the social networking giant.

The company states that Meta must now either comply with Apple’s guidelines or remove boosted posts from their apps, suggesting that it has been violating Apple’s policies by offering the pay-to-boost option. It's merely increasing the price of those in-app purchases because it doesn't want to do the latter and doesn't want the effect on its bottom line to suffer.

To avoid the upcharge, advertisers can opt to pay to boost posts from the web on Facebook.com or Instagram.com (both are compatible with desktop and mobile browsers). Since in-app purchases are the simplest method to make purchases on Apple products, Meta is aware that users may not view this as a convenience. Those who want to use in-app purchases will therefore have to pay extra for the option.

Raising the price of iOS boosts is probably an attempt by the company to incite anger that will support its larger efforts to break Apple's monopoly on the iOS app market. Similar to other major software companies like Epic Games, Spotify, Match, and others, Meta wants to be free to provide its payment methods within its apps instead of having to rely on Apple's in-app purchases, which charge the company a 30% commission. Legislators and regulators are being pushed by the firm to alter Apple's business practices. It may have gained some more allies in its conflict with Apple by passing on Apple's 30% levy to the thousands of small business marketers on iOS.

Subsequently this year, the modifications will be extended to additional markets, starting with the U.S. Meta applications.

With Apple growing its ad business and cutting into Meta's profits, the two have become more and more in conflict. Ad market share was lost by Meta as Apple increased with the introduction of App Tracking Transparency, which gives users the option to refuse to have their apps follow them. For an extended period, the company contended that Apple's ATT would reduce its advertising earnings and cautioned investors that "headwinds" from ATT would affect its own capacity to generate income from advertising. After a quarter of profit tripled and a dividend announcement was made, Meta has now moved past the ATT repercussions.

The CEO of the social networking giant, Mark Zuckerberg, told investors that Apple's DMA requirements were "so onerous" that he doubted any developer would opt-in. The social networking giant was also among those who criticized Apple for its compliance with the new EU regulation, the Digital Markets Act.

Following Meta's criticism, Apple released a statement to 9to5Mac. In it, the company said that in-app transactions for digital products and services have always been required by the App Store and that it has worked with Meta to allow the company more time to comply with its rules.