Apple is reportedly stirring up controversy with several developers of social networking apps that are prominent in China. The issue concerns a “tipping” feature common in many of these apps, which allows users to pay content creators directly.
A number of social networking apps, including the wildly popular WeChat, allow users to ‘tip’ each other using mobile wallets, providing content creators with a source of revenue. Typically, these tips are conducted outside of Apple’s system, with the services offered to users for free as a way to increase user engagement.
According to a new report from the Wall Street Journal, Apple’s stance is that the money exchanged by users — specifically tips — are in fact a form of in-app payment. That would allow the company to take a 30-percent cut of each transaction, per App Store rules.
Two company executives speaking to the report allege Apple told them that a refusal to disable the function could prevent updated versions of the apps from being made available to users, and could force Apple to pull the apps from the App Store entirely.
This switch to using a payment processing platform that takes a fee for the transaction is a sticking point for the companies involved. “We don’t charge anything as the platform, but Apple gets 30 percent for doing nothing,” one of the executives complained.
This all comes at a time when Apple has hit a roadblock in its Chinese expansion. Domestic manufacturers, like Huawei, Oppo, and Vivo, are outperforming the iPhone maker. In 2016, Apple fell from first place among smartphone vendors in the country for the first time in five years.