Apple calls out Meta for hypocrisy

Meta’s poked its face out the book as it admits plans to levy a 47.5% commission on virtual transactions in its metaverse.

Apple, AR, Meta, Facebook, iOS
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Meta’s plans to levy a 47.5% commission on virtual transactions in its metaverse – an astonishing charge when compared to what other digital operators, including Apple, charge for transactions on their platforms.

Apple calls out Meta for hypocrisy

All the world probably knows about Apple’s problems with Meta. Not only does the entity formerly known as Facebook have a business plan that relies heavily on gathering the kind of personal data Apple thinks it is important to protect, but the social and advertising company has also slammed Cupertino for the 30% (really 15%) it charges developers for App Store sales.

That’s why Apple has gone public with a very dismissive response to Meta’s news. Apple spokesperson Fred Sainz said in an email picked up by MarketWatch:

“Meta has repeatedly taken aim at Apple for charging developers a 30% commission for in-app purchases in the App Store — and have used small businesses and creators as a scapegoat at every turn,” the statement points out.

 “Now — Meta seeks to charge those same creators significantly more than any other platform. [Meta’s] announcement lays bare Meta’s hypocrisy. It goes to show that while they seek to use Apple’s platform for free, they happily take from the creators and small businesses that use their own.”

Game of thrones

You could dismiss this as a spat between business rivals, but I think the dispute will have far more impact than most in business immediately see. In part, this is because we spend too much time focusing on use of VR tech for gaming, with less recognition on the impact it has and will have in real life, including emerging business cases for medical, maintenance, warehousing and more.

But what proponents in the space understand — these include Apple CEO Tim Cook, who has called the possibilities “profound” – is that VR/AR may be as transformative as the internet.

Consider the extent to which the always-connected nature of the Internet has transformed every part of life. Now add to that the sharing of real-life moments in real time and up-to-the minute information, all packaged in a format that feels a whole lot more TikTok human, made available not just when staring at a screen but throughout every waking moment of your day.

While a big part of me is horrified at that kind of melding of the internet with everyday life, we already see it each time we watch each other playing with a smartphone at a metro station. This weirdly spiced reality salad means every waking second of our day suddenly enters the attention economy.

And Meta wants to take a 47.5% cut of sales within that.

How much is too much?

In other words, in the new frontier Meta wants to make, it hopes to take almost half the money.

This won’t be trivial amounts of cash. The internet already accounts for 12% of US grossdomestic propduct.

Meta is placing a bet on taking almost half of a very big (albeit digital) chunk of that. That’s what I call concentrated market power. Indeed, Meta’s pecunious ambition makes Apple’s 30% (again, in reality, 15%) cut of sales seem cheap.

Meta has already said it hopes to generate an “iPhone moment” when it introduces the AR devices it hopes will run on its metaverse; Apple, meanwhile, is expected to try to repeat one of its classic release moments (previously occupied by various introductions including those of the Mac, iPad, iPhone, and iPod) with its own take on AR glasses, beginning perhaps as soon as WWDC.

But with Meta’s business proposal based on seemingly untrammelled exploitation of customer data and Apple’s built around concepts of personal data sovereignty, for many in business the commission rates Meta’s making raise big questions:

Who do you want to pay? Who will do your augmented semi-virtual business work for? You? Your customers? Apple? Meta? And what precisely is the appropriate commission anyone in Big Tech should be able to charge for events in tomorrow’s virtual worlds?

The Meta matter matters

In addition to which, given Apple mentioned today that 22% of all its carbon emissions are generated by customers recharging Apple devices, what will be the climate impact of an industry out of which Meta hopes to make almost 50% profit?

And what moves will Meta make to mitigate that?

Of course, businesses must already be thinking about how to position themselves to gather their own attention in virtual worlds, while the platform provider(s) that wins this war will be those that convert mild interest into deep engagement.

But how much will you charge your customers for commerce in a virtual world, and to what extent will you be happy passing an additional near 50% fee onto them?

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Copyright © 2022 IDG Communications, Inc.

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