Reports say Apple is pressuring Tencent and ByteDance to plug the "payment loophole" that avoids in-app purchase commissions, or else WeChat and TikTok updates will be refused for listing

China Finance Online
2024.08.02 06:26
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Apple is putting pressure on Tencent and ByteDance, demanding to close the "payment loophole" that avoids in-app purchase commissions. Apple has warned Tencent and ByteDance that if they do not make changes, they will refuse to update WeChat and TikTok. Apple requires Tencent to disable in-game messaging features, while ByteDance needs to close similar loopholes, otherwise the new version of TikTok will not be accepted. Apple states that all digital goods sales must go through its system, otherwise the app may be rejected. WeChat and ByteDance have recruited thousands of small game or mini-program developers, but Apple is trying to shut down web links circulated by developers. Apple is still seeking further measures to disable in-game chat between creators and players

According to Bloomberg's sources at noon today, Apple is intensifying pressure on Tencent and ByteDance, demanding "fundamental changes" to the most popular applications in China from both companies.

Sources say that Apple has been asking Tencent and ByteDance in recent months to "plug the loopholes" because creators on WeChat and Douyin platforms use these "loopholes" to lead users to external payment systems, thereby avoiding the usual 30% commission charged by Apple.

In May of this year, Apple warned Tencent that if it did not remove the links used by small game developers to accept non-Apple platform payments, it might reject important updates to WeChat. Several months later, Apple requested the company to disable a key "in-game messaging" feature, which also diverts users, and Tencent has not agreed to these requests.

One source also mentioned that Apple has taken similar actions against ByteDance - in June of this year, Apple informed ByteDance that it would not accept new updates to Douyin unless similar payment loopholes were also closed.

Tencent declined to comment, while representatives from ByteDance did not respond to requests for comment. An Apple spokesperson cited their guidelines, stating that all digital goods sales must go through Apple's system, otherwise the review team may reject apps that violate this policy.

It is noted that most payments or services completed through WeChat are exempt from Apple's charges, but the content of the WeChat app itself and other online entertainment (such as mini-games) still require payment of iOS revenue sharing fees.

Reports indicate that WeChat and ByteDance have recruited thousands of small game or mini-program developers to create content for their WeChat and Douyin ecosystems. As these mini-games become popular, developers have started selling in-game items to make profits, many of whom have found ways to bypass the Apple payment system to increase their meager profits. This practice is called "guiding" - leading players outside of the major platforms.

On WeChat, Apple has detected and attempted to close the web links circulated by developers - Tencent has agreed to close this "loophole" through a WeChat update released in early July. However, Apple is still seeking further measures, requesting Tencent to disable in-game chat functions between creators and players, as this function is also used to provide alternative payment links.

Two sources said that Tencent did not agree to the above request because it believes that the proposed changes would weaken the product and affect the quality of service players receive. The company has informed game developers that their business models "may be disrupted."

Douyin is also facing pressure from Apple. According to sources, in June, Douyin launched a plan to allow Apple to charge commissions in in-app purchases. If not compliant, Douyin will not be able to update its activities for the 618 e-commerce event