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Facebook joins Fortnite in blasting Apple's App Store 'tax'

In this combo of file photos, Apple CEO Tim Cook speaks on the new Apple campus on Sept. 12, 2017, in Cupertino, Calif., left, and Facebook CEO Mark Zuckerberg speaks at the F8 Facebook Developer Conference on April 12, 2016, in San Francisco, right - Eric Risberg /AP
In this combo of file photos, Apple CEO Tim Cook speaks on the new Apple campus on Sept. 12, 2017, in Cupertino, Calif., left, and Facebook CEO Mark Zuckerberg speaks at the F8 Facebook Developer Conference on April 12, 2016, in San Francisco, right - Eric Risberg /AP

Facebook has joined the protest against Apple's "App Store tax", accusing the iPhone maker of creaming off the "hard-earned" income of small businesses struggling with the pandemic.

The social media titan said it would be waiving all fees for the first year of its new online events service, which will let users market, host and get paid for hosting live broadcasts.

But it also warned customers that Apple had refused to waive its own 30pc cut, meaning that they would lose 30pc of any tickets bought using Facebook's iPhone and iPad apps.

It came just one day after Epic Games, the makers of Fortnite, goaded Apple into kicking the game off its App Store and then ambushed it with a lawsuit for monopoly abuse lawsuit.

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Both actions are part of a broad revolt among app makers against Apple's rigid App Store fees, which critics characterise as anti-competitive rent-seeking.

Fidji Simo, the vice president in charge of Facebook's main app, said: "To support small businesses and creators, Facebook will not collect any fees from paid online events for at least the next year... small businesses will keep 100p of the revenue they generate from paid online events.

"We asked Apple to reduce its 30pc App Store tax or allow us to offer Facebook Pay so we could absorb all costs for businesses struggling during Covid-19.

"Unfortunately, they dismissed both our requests and [businesses] will only be paid 70pc of their hard-earned revenue."

To rub it in, Facebook's payment screen will warn users that "Apple takes 30pc of this purchase", while its payment screen on other systems will say: "Facebook doesn't take a fee from this purchase."

Unlike Google's Android operating system, Apple's iOS does not allow users to install any apps except via its own strictly controlled app store, and it forbids all in-app purchases and subscriptions that do not use its own payment system.

That iron control allows Apple to charge a 30pc cut of all in-app transactions, and it frequently boots apps off its service for alleged breaches.

Last week, Facebook also admonished Apple for failing to approve its new Facebook Gaming app, telling iPhone users that they would be unable to access some of its key features due to the phonemaker's policies.

Microsoft, too, has criticised the company for barring cloud video gaming services, including its upcoming xCloud, from its devices.

“Apple stands alone as the only general purpose platform to deny consumers from cloud gaming and game subscription services like Xbox Game Pass," Microsoft said.

Mr Simo went on: “We think it’s really important to be transparent, when people are supporting small businesses, [about] where their money is going.

"When people are paying $20 for an online event, they think it’s all going to a local business when 30pc is going to an almost $2 trillion company... we thought that it was an important thing to call out in the context of supporting small businesses."

Both Facebook and Apple have sought to portray themselves as champions of small businesses and engines of job creation during the pandemic. Apple's boss Tim Cook described the App Store as an "economic miracle", while Facebook's Mark Zuckerberg has called its services an economic "lifeline".