Apple has been exerting pressure on Chinese tech giants ByteDance and Tencent to close loopholes in their apps that allow users to make in-app purchases outside of Apple’s ecosystem. The move is seen as an attempt by Apple to capture a larger share of the lucrative commission fees generated by in-app purchases.
According to reports, Apple began its pressure campaign in May, warning Tencent that it would reject crucial updates to its popular messaging app WeChat if it didn’t eliminate the ability for users to make payments outside of Apple’s ecosystem. Tencent complied with the request, issuing an update in July, but Apple has since asked the company to go further by disabling in-game chat between creators and players, which it claims is another loophole that could funnel users to third-party payment systems.
Apple has also been applying pressure on ByteDance, the owner of the popular short-video app Douyin, which is similar to TikTok. The company reportedly threatened to withhold updates of the app unless ByteDance plugged gaps that steer users away from Apple’s commission-generating ecosystem.
Both Tencent and ByteDance are said to be resistant to Apple’s demands, likely due to the fact that they levy their own commissions on creators and don’t want Apple cutting into their bottom lines. Apple’s aggressive moves come as the company faces declining profits in China, where the iPhone failed to crack the top five in sales last quarter.
Apple’s stance on the issue is clear, with a spokesperson stating that company guidelines dictate that the sale of all digital goods must go through its system, and that the review team has the power to reject app submissions that violate that policy.
The issue is not unique to China, as Apple faces similar challenges around the world. The European Commission has ruled that Apple must allow app developers to steer users to payment systems and offers outside of the App Store, and the company faces potential fines from the EU. In the US, Apple is also facing lawsuits from companies such as Epic Games, which is owned in part by Tencent.
