Apple tells Chinese app makers to cut tips or pay up

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Apple Money 2
Apple wants to take its cut of the money Chinese app users send as tips to content creators.
Photo: Ste Smith/Cult of Mac

Apple has risked upsetting customers in China by revealing plans to take a percentage of donations that are sent to content creators on social media, via the “tip” function of local apps like WeChat.

Apple previously told developers to disable the feature, but it has since reconsidered and decided that this represents an opportunity to make some money. Since they are considered in-app purchases, Apple wants to take its usual 30 percent cut of payments.

The move has a chance of backfiring, however. Culturally, tipping is viewed as being separate from purchases. This means that customers are unlikely to be happy knowing that money they have handed over to a creator is subject to what amounts to a fine from Apple.

This wouldn’t be the first time Apple has run into problems in China. Previously Apple was ordered to shut down the iBookstore and iTunes Movies in the country, while Apple has also been forced to accept the Chinese government’s demands that it run network safety evaluations on all Apple products before they can be imported into the country.

In addition, Apple’s products were booted off the list of approved state purchases, along with other Western companies such as Cisco and Intel — in favor of thousands of Chinese-made products. Most recently, Apple ran into another hurdle in China, with internet regulators in the country reportedly calling on Apple to “tighten its checks” on live streaming apps which appear in the App Store.

The amount of money that Apple takes as a cut for offering services has frequently been a bone of contention. For example, in Australia the rise of Apple Pay has been thwarted due to banks quibbling with Apple about the percentage of payments that it takes.

That’s one thing in a market like Australia, which represents a relatively small business opportunity for Apple. In China — which has overtaken the U.S. as Apple’s biggest app market, and for whose audience Tim Cook says Apple designs its products for — there’s a much higher probability things could blow up in Apple’s face.

Source: WSJ

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