Apple pressures Tencent and ByteDance to close app fee loopholes in China

Apple is exerting pressure on two of China’s leading tech companies, ByteDance and Tencent, to close loopholes in their popular apps that bypass Apple’s standard 30% commission, according to a report by Bloomberg.

These loopholes are tied to mini-apps within Tencent’s WeChat and ByteDance’s Douyin, which allow users to play games, hail taxis, and make purchases without leaving the app. These mini-apps have enabled transactions to occur without Apple taking its typical cut. Apple has warned Tencent and ByteDance that future updates to their apps will be rejected unless these loopholes are addressed.

In May, Apple specifically directed Tencent to stop mini-game developers from using external payment links on WeChat and to disable in-game chats that facilitate such transactions. Tencent has resisted this request, arguing that it would negatively affect the user experience. Similarly, in June, Apple informed ByteDance that it would not approve new updates for Douyin unless it stopped using similar external payment links.

Apple’s efforts to enforce its payment policies come as other major players in China, such as Huawei Technologies Co., begin to impose their own commissions on app developers, albeit with exceptions like Tencent’s WeChat. The enforcement of Apple’s policies could disrupt the established dynamics between platform operators and app developers in China.

An Apple spokesperson reiterated that all digital goods sales must go through its system and that app submissions violating this policy may be rejected.

WeChat, used by over a billion people in China for a wide range of services, has been particularly affected. Many payments made through WeChat mini-apps are exempt from Apple’s fees, but in-app content like mini-games remains subject to iOS revenue-sharing. Apple’s confrontation with Tencent over WeChat could introduce new challenges, especially as Apple navigates various regulatory pressures globally.

Douyin, known internationally as TikTok, also faced Apple’s pressure. After being warned by Apple, ByteDance adjusted its in-app purchase program to comply with Apple’s commission requirements, allowing it to continue updating its app and avoid disruptions to its services.

Apple CEO Tim Cook expressed optimism about the long-term potential in China, despite recent challenges. “We continue to be confident in the long-term opportunity in China,” Cook said, acknowledging the complexities but emphasizing the strategic importance of the market.