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Apple Exempts Virtual Events From Paying 30% App Store Cut Through June

Apple Exempts Virtual Events From Paying 30% App Store Cut Through June

Apple Inc (NASDAQ: AAPL) is exempting digital classes and virtual events from its 30% App Store commission until June 30, extending the commission-holiday period from December.

What Happened: The exemption is available to apps that offer paid online group event experiences through in-app purchases, whether they be one-to-few or one-to-many real-time experiences, Apple said in a statement.

The Tim Cook-led company said it recognizes that “adapting experiences from in-person to digital continues to be a top priority,” as the “world fights COVID-19.”

The tech giant’s existing guidelines allow real-time person-to-person experiences like tutoring students or fitness training to use purchase methods other than in-app purchases.

Why It Matters: ClassPass and Airbnb began offering digital classes as they moved their business online during the pandemic, but they were asked by Apple to pay the 30% commission for in-App purchases, the New York Times reported.

Cook was questioned on his company’s policies surrounding online classes at a congressional hearing in July where he said, “we would never take advantage of [the pandemic],” according to CNBC.

The CEO told Congress that in cases where “something has moved to a digital service, which technically does need to go through our commission model.

This is the second major concession by Apple with respect to its App Store. Earlier this month, the Cupertino-based company slashed its commission to 15% from 30% for small businesses earning up to $1 million per year.

In August, Facebook Inc (NASDAQ: FB) cried foul over what it called “App Store Tax” on its initiative to support small businesses through online events.

Apple temporarily waived its App Store fee for Facebook’s initiative in September as they were aimed at helping businesses hit by the pandemic, reported TechCrunch.

Epic sued Apple in August after its "Fortnite" game was removed from App Store for trying to circumvent the 30% commission by offering alternative payment methods to players.

Price Action: Apple shares closed nearly 3% lower at $113.85 on Monday and rose 0.66% in the after-hours session.


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