Apple puts pressure on Tencent and TikTok owner ByteDance to plug Payment Loophole that circumvents in-app purchase commissions
A new report claims that hat Apple is stepping up its "pressure" on Tencent and ByteDance, requiring the two companies to make "fundamental changes" to the most popular applications in China .
People familiar with the matter said that Apple has asked Tencent and ByteDance to "plug loopholes" in recent months because creators on the WeChat and TikTok platforms would use these "loopholes" to direct users to external payment systems, thereby avoiding the 30% commission that Apple usually charges .
In May, Apple warned Tencent that it might reject a major WeChat update if it didn’t remove links used by mini-game developers to accept payments on non-Apple platforms . Months later, Apple asked the company to disable a key “in-game messaging” feature that would also divert users, demands that Tencent has yet to agree to.
One of the people familiar with the matter also said that Apple has taken a similar approach against ByteDance. In June this year, Apple informed ByteDance that it would not accept new version updates of TikTok unless it also plugged similar payment loopholes .
WeChat and ByteDance have recruited thousands of small game or mini-program developers to create content for their WeChat and Douyin ecosystems, the report said. As these small games became popular, developers began to make profits by selling in-game items , and many found ways to circumvent Apple's payment system to increase their already meager profits. This practice is called "guiding" - directing players outside the big platforms.
On WeChat, Apple detected and attempted to shut down web links circulated by developers — a “loophole” that Tencent agreed to close with a WeChat update released in early July. But Apple is still seeking further steps, requiring Tencent to disable the in-game chat feature between creators and players, as it is also being used to provide alternative payment links.
Tencent did not agree to the request because it believed the proposed changes would weaken the product and affect the quality of service for players, two people familiar with the matter said. The company has told game developers that their business models "may be disrupted."
For more on this, read the full Bloomberg report.