Airbnb and ClassPass Fight with Apple Over App Store Commission

A New Tork Times report highlights how Apple asked ClassPass and Airbnb to add in-app purchase support to comply with the rules of the App Store.

ClassPass allowed users to book classes at their nearby gyms. However, once the pandemic hit, it switched to offering virtual classes to its customers for a price. Since ClassPass had pivoted its business, Apple claimed it was entitled to receive a 30 percent cut from the sales. The company previously did not charge ClassPass any commission despite the app allowing users to book classes in their local gyms. A source told New York Times that ClassPass has not been charging any commissions on virtual classes and passing the total sales amount to gyms since the pandemic hit.

Similarly, Apple had asked Airbnb for a 30 percent cut from sales generated by its “online experiences” business. While the company had launched this endeavor in 2016, it started offering virtual cooking classes, meditating sessions, and more under “online experiences” after the pandemic struck. This move led Apple to reach out to Airbnb and inform it about the need to pay the commission on sales.

Apple said it believed that Airbnb had long intended to offer virtual experiences — not that the business was created simply because of the pandemic — and that it would continue to do so once the world has resumed to normal. Apple also pointed out that Airbnb had never paid Apple any money despite the fact that it built its multibillion-dollar business with the help of its iPhone app.

Apple is still negotiating with Airbnb and if the talks between the two companies fall through, the app could be booted from the App Store.

“To ensure every developer can create and grow a successful business, Apple maintains a clear, consistent set of guidelines that apply equally to everyone,” the company said in a statement.

Apple on its part claims that it is not forcing Airbnb and ClassPass to implement IAPs to generate revenues. Instead, it just wants them to comply with the App Store regulations, and creating an exception for them would be unfair for other app developers who have been charged a similar commission for years. The company has given ClassPass until the end of the year to implement the change. However, a source claims that ClassPass was given until the end of the month to adhere to the regulations. Eventually, the company dropped the virtual classes feature from its iPhone app.

Our Take

Apple has been under heavy scrutiny for its tight control over the App Store and how developers are forced to pay a 30% commission on the sales generated. A number of app developers have already filed an anti-trust complaint against Apple which has led the EU to launch an anti-trust investigation against the company.

Do you think Apple is being unfair with its App Store rules? Or do you think Apple is right to ask app developers for a 30 percent commission on sales?

[Via New York Times]