Facebook to promote new ways to prevent Apple from taking 30% cut

The Instagram CEO recently made an announcement that the company is trying to promote offline transactions, so that the creators could save a massive 30% cut from Apple.

Facebook to promote new ways to prevent Apple from taking 30% cut
Instagram CEO, Adam Mosseri announced that Instagram will introduce new feature to prevent Apple's 30% cut. (Picture credits: CNBC)

New Delhi: The rivalry between Facebook and Apple is no secret and it just got a little nastier after Apple launched its new iOS 14.5 update. Facebook is focusing on increasing the income for its creators and trying to create a sustainable economy for its users to make a living off its apps. Instagram CEO Adam Mosseri said on Wednesday that the firm is aiming to boost physical transactions between creators and businesses. This will save the 30 per cent cut of Apple, which the California-based firm charges for in-app sales.

Purchases of software or digital items from apps offered through the App Store typically net Apple a 30% cut. There are just a few exceptions to this rule. This means that artists have to split the money from items sold within the app between themselves, Facebook, and Apple. Instagram and other apps had to follow the protocols of Apple for the transactions that take place on iOS. That is why Instagram is seeking new ways to stop this huge cut and making it easier for the creators to do business and make money. The social media app will be trying to help the creators and brands to find each other and make the transactions happen offline. Facebook, the parent company of Instagram, has not specified the ratio of the cut it will take. But, it is expected to be less than 30 per cent.

The battle for content creators and social media influencers is heating up. Social media companies are trying to woo creators and influencers to spend more time on their platforms. This will bring more ads and, thus, more revenue to the creators. However, because creators have a say in where they spend their time, social media firms are increasingly attempting to attract influencers in ways that could benefit both parties in the long run.

Facebook and Apple have previously had public spats about the 30 per cent commission rate. Last year, Facebook added a disclaimer to its app informing users that Apple would receive 30 per cent of the revenues if they purchased tickets to online events via iOS. Apple demanded the message to be taken off, claiming that the message was irrelevant to customers. At World Wide Developers Conference, Apple announced major new privacy features in iOS 15. Its iOS 14.5 update had already resulted in a tiff between both the companies.