Apple Leans on Tencent, ByteDance to Close Payments Loophole, Report Says
Xu Wei
DATE:  Aug 07 2024
/ SOURCE:  Yicai
Apple Leans on Tencent, ByteDance to Close Payments Loophole, Report Says Apple Leans on Tencent, ByteDance to Close Payments Loophole, Report Says

(Yicai) Aug. 7 -- Apple is pressurizing Tencent Holdings, operator of social media platform WeChat, and ByteDance Technology, owner of short video platform Douyin, to stop users from making payments for in-app purchases outside of the US tech giant’s ecosystem, The Paper reported yesterday, citing industry insiders.

It is common practice for developers of mini-games, which are short games that is usually part of another game, and short dramas to use every means to bypass Apple’s payment system, the report said. With mini-games, for example, users can opt on entering the game to pay to the customer service center rather than Apple.

Commissions on Apple’s app store are high at around 30 percent. This means that for every CNY1 (USD0.14) spent by a user in a game or short drama that he/she downloads from the iOS store, CNY0.30 will go to Cupertino-based Apple.

Apple has been pressuring Beijing-based ByteDance and Tencent to close loopholes in China that funnel customers to external payment systems for making in-app purchases, Bloomberg reported last week. Reports indicate that this pressure campaign began in May.

Apple has allegedly warned Tencent that it will reject crucial WeChat updates if the Shenzhen-based firm doesn’t eliminate the ability for users to make payments outside of Apple’s ecosystem.

Apple is still in talks with both firms, but no agreement has been reached yet, the report said. Neither Tencent nor ByteDance have responded so far.

China’s mini-game market was worth over CNY40 billion (USD5.6 billion) last year and should top CNY60 billion this year, third-party statistics showed.

Editor: Kim Taylor

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Keywords:   Apple Inc.,ByteDance,Tencent