Coinbase, Metamask and Elon Musk at Odds with Apple over 30% App Store fees : Is it Fair?
In October 2022, Apple announced its new taxation policy for crypto and NFTs transactions. Apple's 30% tax on in-app purchases has become one of the biggest problems for leading crypto and NFT firms.
Coinbase vs Apple
Recently customers of Coinbase have grumbled about their inability to transfer NFTs via the mobile application in November 2022 on the App store. Further analysis revealed that Apple withheld the latest app release until the capability was required for conducting NFT transactions.
Investigations revealed that Apple wanted to obtain gas charge commissions for transactions performed on the Coinbase NFT wallet app. The iOS device manufacturer desired that gas costs be paid via their in-app purchase mechanism. To date, Apple defends their interests while collecting 30% of the trading fees that Coinbase charges consumers.
In response to the requests, Coinbase declared that meeting the requirements was unfeasible. According to them, the nature of NFT, blockchain, and transactions makes such projects impractical.
One of the causes for this assumption is that Apple's in-app purchasing mechanism does not support cryptocurrencies. As a result, even if it tries, Coinbase cannot satisfy this commitment. Furthermore, this proposal is analogous to requesting a commission every time a consumer exchanges emails through open internet protocols.
At present, users can still access their assets through the web or other devices. Moreover, Coinbase is optimistic about striking an arrangement with Apple. It is almost hard for NFT holders or owners to transfer or sell assets from iOS devices.
Aside from merchants, anyone wishing to share their NFTs with family members would be unable to do so. This is due to new rules implemented by Apple to increase profits at the expense of customer experience. Many experts predict a decrease in NFT uses on Apple devices. There is a high chance that crypto fans will migrate away from iOS devices and toward alternative operating systems like Android.
Well, the course of events doesn't stop here.
Metamask's Co-founder's Take on the Issue
Just recently, former Apple employee turned Metamask wallet creator Dan Finlay says that the industry should abandon using the App Store because of Apple's 30% tax on in-app purchases, which he calls an "abuse of monopoly."
"I will surely stand in solidarity here," Finlay said in response to the revelation that Apple had previously prohibited Coinbase's iOS Wallet until it removed NFT transfer functionality.
Finlay, however, is not the only cryptocurrency enthusiast who is critical of Apple's policy. Epic Games CEO Tim Sweeney and Polygon Studios CEO Ryan Wyatt voiced displeasure with the 30% tax on in-app sales.
As cryptocurrency firms strive to build out functionality for their mobile apps to give users an alternative to browser-only experiences, many of them are being rejected or removed from the iOS App Store owing to Apple's tax regulations.
In an increasingly digital environment, such regulations might seem arbitrary. While businesses like Amazon can sell actual objects through their apps tax-free, crypto companies like Coinbase and OpenSea are not allowed to offer digital goods tax-free. Digital art (when traded as an NFT) is taxed, but physical art is not.
Instagram, which launched in-app NFTs, will implement Apple's 30% tax on all NFT purchases, making mobile transactions significantly less appealing to users. As per Apple's guidelines, apps may use in-app purchases to provide minting, listing, and transferring services for NFTs. But a 30% tax applies to each of these deals.
Elon Musk shows disgrace towards Apple's Regulation
The mega entrepreneur and the recent Twitter CEO, Elon Musk, has pushed back the release of Twitter's verified membership service in an effort to save money by not using Apple's App Store. In a series of tweets, Musk claimed that Apple was stifling free expression and abusing its market dominance.
He criticised Apple's practise of taking 30% of all App Store payments from selected developers. Musk also accused Apple of restricting speech by forcing applications in its store to adhere to particular content guidelines in a series of tweets and questioned whether the firm opposes free speech in America. Not only this, but Musk personally targeted Apple CEO Tim Cook's Twitter account in one message.
According to Musk, Apple has discontinued the majority of its Twitter advertising. Given that, advertisements from major brands, including Volkswagen, Eli Lilly and General Mills, have been cut or eliminated from the platform in the weeks after Musk's takeover.
However, Elon Musk announced yesterday that Apple has resumed advertising on Twitter.
In this given scenario, major companies like Coinbase and Twitter are uniting against Apple's regulation. Apple's new taxation policy for crypto and NFTs transactions is definitely a big setback for crypto and NFT firms. It will be interesting to see if Apple will make any amendments to its 30% tax regulations. Apple has yet not given any response in this particular matter.