Apple is trying to pressure Chinese tech giants Tencent and ByteDance to make fundamental changes to China’s most popular mobile apps, a standoff that could heighten tensions in the world’s largest smartphone market, reports Bloomberg.
Image source: 偉宗勞 / unsplash.com
In recent months, the iPhone maker has been demanding that the two companies close loopholes exploited by developers of mini-apps inside their super-apps that direct users to their own payment systems, thereby bypassing Apple’s standard 30% fee on each transaction, Bloomberg sources said.
In May, Apple warned Tencent that it could reject major WeChat updates unless it stopped developers of mini-apps inside the messaging app from posting payment links outside of Apple’s platform. Apple also asked the company to disable the ability for mini-app developers to communicate with users, something Tencent has yet to do. In June, the iPhone maker warned ByteDance that it would stop approving updates to Douyin, the Chinese version of TikTok, unless the company closed similar loopholes in the app.
Apple has sought to tightly control its mobile ecosystem, citing a desire to ensure quality and safety around the world, but it has become overly aggressive in China this year, risking alienating its Chinese partners and drawing unwanted attention from regulators around the world for its other policies.
Image source: Owen Winkel / unsplash.com
Huawei, Apple’s most dangerous competitor in China, will soon start charging developers a fee for its Harmony mobile ecosystem, and Tencent’s WeChat is exempt. It’s not just a messaging app — the app has more than a billion Chinese users who use it all the time, from paying bills to booking movie tickets. Apple has waived most of these payments, but transactions in mini apps and in-app purchases are still subject to fees.
Unlike in the US, Apple is no longer the biggest player in China – it even dropped out of the top five smartphone sales in Q2. And local tech giants Tencent and ByteDance still dominate the internet content market, including games and videos, and continue to charge their own fees to developers who create content in the WeChat and Douyin ecosystems. Mini-games have become very popular, their developers have started monetizing them, and many of them have found a way to bypass Apple’s fees to increase their margins.
Tencent has already agreed to Apple’s request to disable links to third-party payment systems in mini-apps, but now the American company is asking to disable in-game chats between developers and users, because links to alternative payment services are now distributed through them. Tencent has not yet agreed to comply with this request, because such a change would reduce the quality of service for players – and warned developers that their business is at risk.
Douyin launched an in-app purchase program in June, but was forced to charge Apple a fee because the American manufacturer would have blocked the app update and the planned e-commerce campaign for June 18 would have been disrupted. “If you look at the iPhone in Greater China, the install base has been at an all-time high. And so we remain confident in the long-term prospects in China. I don’t know what every chapter of the book is going to be, but we are confident in the long-term prospects,” Apple CEO Tim Cook told analysts after the quarterly earnings call.
If you notice an error, select it with your mouse and press CTRL+ENTER.
