A paid and ad-free Facebook
In the columns of the economic daily, we therefore learn that there would not always have been war between Apple and Facebook. The two companies would have agreed that the social network offers a subscription, like YouTube Premium, to no longer display advertising to its users concerned. The subscription had to go through the App Store and Apple would have recovered 30% commission on each sale, according to its price valid for all applications available on the App Store with integrated purchase functionality.
The discussions would ultimately have failed when Facebook did not support one of Apple’s additional requests. Among its advertising features, the social network offers brands and merchants the opportunity to boost the visibility of their posts in users’ news feeds. And for Apple, this feature should also have been affected by the move to 30% commission. However, this source of income is one of Facebook’s most important and the social network did not want to allow itself to accept losing part of it, recovered by Apple.
First drop in income, first debts
If the two companies would have been winners to launch an ad-free subscription on the social network, the rest of these requests from Apple resulted in a halt in negotiations and the start of the war between the two. Since then, Facebook has suffered greatly from the change in policy on Apple products. The Wall Street Journal reported that only 37% of users gave their approval for applications to track their activity and therefore offer them targeted advertising. As a result, during the last quarter, Facebook announced for the first time a drop in its income.
Of course, the social network was not the only one to rave about the change at Apple (with iOS 14.5 in April 2021). Snapchat was among the companies most stressed by the news. Fortnite, the game from Epic Games, had also taken a stand in an attempt to bring Apple to justice. But rather than wanting to negotiate on the 30% commission, the company instead asked that Apple let users choose to go through an alternative payment method, like that of Fortnite.
Since then, Facebook has focused mainly on the Metaverse and hopes to be able to control its platform as well as its products (thanks to Oculus). Last week to raise capital, Facebook went into debt for the first time in its history.