Apple is pressuring Chinese tech giants Tencent and ByteDance to make fundamental changes to China’s most popular mobile apps, a standoff that could heighten tensions in the world’s largest smartphone market. The iPhone maker has been demanding that the two companies close loopholes exploited by developers of mini-apps inside their super-apps, which direct users to their own payment systems, thereby bypassing Apple’s standard 30% fee on each transaction.
In May, Apple warned Tencent that it could reject major updates to WeChat unless it stopped mini-app developers inside the messaging app from posting payment links outside of Apple’s platform. Apple has also asked the company to disable a feature that allows mini-app developers to communicate with users, something Tencent has yet to do. In June, the iPhone maker warned ByteDance that it would stop approving updates to Douyin, the Chinese version of TikTok, unless the company closed similar loopholes in the app.
Potential Consequences and Market Dynamics
Apple has been trying to keep a tight rein on its mobile ecosystem, citing a desire to ensure quality and safety around the world, but it has become overly aggressive in China this year. It risks alienating its Chinese partners, and its other policies have already drawn unwanted attention from regulators around the world.
Unlike the US, Apple is no longer the biggest player in China — it even dropped out of the top five smartphone sales in Q2. Local tech giants Tencent and ByteDance still dominate the online content market, including games and videos, and continue to charge their own fees to developers who create content in the WeChat and Douyin ecosystems.
Tencent has already agreed to Apple’s request to disable links to third-party payment systems in mini-apps, but now the American company is asking to disable in-game chats between developers and users, because links to alternative payment services are now distributed through them. Tencent has not yet agreed to fulfill this request, as such a change would reduce the quality of service for players, notes NIX Solutions.
We’ll keep you updated on any developments in this ongoing situation between Apple and Chinese tech giants.