Apple Inc. is increasing pressure on Tencent Holdings Ltd. and ByteDance Ltd., demanding significant changes to some of China’s most popular apps. The iPhone maker has insisted that these companies close loopholes that allow in-app creators to direct users to external payment systems, thus bypassing Apple’s 30% commission fee.
In-App Payment Controversy
Over recent months, Apple has been firm in its stance, requiring Tencent and ByteDance to alter their app functionalities. These changes primarily target the mini-games and other features within apps like WeChat and TikTok, where users are often redirected to external payment methods that evade Apple’s fee structures.
Impact on Major Players
Tencent and ByteDance, both of which dominate the Chinese app market, have relied on these loopholes to offer more flexible payment options to their users. Apple’s demand to shut down these workarounds could significantly impact their revenue streams. These companies might now need to find new ways to accommodate Apple’s policies while maintaining user satisfaction and profitability.
Market Tensions
This move by Apple is unusual and might exacerbate tensions in the Chinese market, the world’s largest smartphone market. By enforcing its payment rules more strictly, Apple risks alienating both app developers and users who favor the flexibility of current payment methods. However, Apple argues that these measures are necessary to ensure a fair and secure in-app purchase system for all parties involved.
Apple’s insistence on closing payment loopholes in apps by Tencent and ByteDance is a bold move that underscores its commitment to securing its commission fees. While this may lead to increased friction with Chinese app developers and users, Apple believes it is crucial for maintaining a consistent and secure payment ecosystem.
