Should Apple Charge Fees for Tipping on Social Networking Apps?

Recently， Apples decision to start taking a 30-percent cut on tips given by users of social networking apps has sparked heated debates in china.

Apple announced in its latest payment rules earlier this June that customers tips for digital content providers will now be regarded as an in-app purchase. therefore， the company will collect a handling fee of 30 percent on money transfer generated through the tipping function.

in-app tipping is a common practice in china. users of social networking apps often tip authors or developers， usually in small amount， to show their appreciation for digital contents or apps. For example， li huanxin runs a public account on wechat， chinas most popular instant messaging app， on which he shares his witty and ironic talk shows. over the past two years， he has received tips totaling 190，000 yuan （$27，900） from his fans.

Foreign live-streaming apps like Facebook live do not offer tipping； instead， Facebook let broadcasters show ads in their streams. Apple keeps 55 percent of the revenue.

As the rule was released， users were divided on whether Apple should charge such a fee. supporters say the rule is in line with the companys long-time practice and Apple， as a business entity， has the right to make commercial decisions. But others maintain that tips on digital contents are essentially gifts. the move may lead to unfair competition， infringe on consumers rights， and test users loyalty.

PRO

Chun Keji Eastday.com

It is reasonable for Apple to charge such a fee. The App Store is like a shopping mall built by Apple where anyone can sell apps on the premise of following the malls rules. The beauty of the mall is that it does not charge rent， and anyone is free to come in and sell their products. Customers， for their part， are willing to pay to access these apps， attracting more and more businesses and app developers. With more and more Chinese people using iPhones， the mall expanded exponentially. Thats when some app developers came up with a new way to attract consumers. Instead of selling things， they invited key opinion leaders （KOLs） to perform and give talks on their digital platforms. Thanks to KOLs extraordinary popularity， enthusiastic fans started giving tips to show their support.

Once this business model was proven a success， more and more app developers followed suit. Gradually， the ground rules of the mall were broken. Deals are made in Apples mall， but Apple does not receive its fair share and risks app developers taking control of its users.

Apple， as the owner of the mall， cannot bear being marginalized. Therefore， it introduced this new payment rule to rectify a broken order. The real issue at stake here is control over users rather than the tips， which are insignificant to a large company like Apple.

CON

Niu Tanqin Media commentator

This new rule means that Apple， as a giant transnational corporation， is now levying a 30-percent tax around the world. Apple， in a demonstration of its arrogance， is saying to us： If you want to use my phones， pay the handling fee.

In my opinion， behind such greediness also lies the firms worry about declining profits in the Chinese market. In the first quarter of this year， its market share in China dropped by 7 percent from the same period in 2015. As Chinese homegrown brands emerge， Apple may face an ongoing shrinking business. Meanwhile， revenues generated from the App Store in China are on the rise， outpacing the U.S. market. What Apple is envious of is the new business model of tipping brought about by WeChat and Alipay. A meager 2 percent of smartphone users use Apple Pay in China.

Facing such an unacceptable situation， Apple attempted to strike back. But it chose the wrong countermeasure. Its stubbornness will only lead to Chinese consumers boycotting Apple products. Policymakers will also be infuriated by the move as it will smother many Chinese Internet-based businesses.

PRO

Xiao Masong Huxiu.com

Such a payment rule is in line with Apples long-time practice. Apple has been charging 30-percent handling fees on in-app purchases of virtual products in its App Store. For example， if you buy a game in the App Store for 199 yuan（$29.2）， about 60 yuan （$8.8） is paid to Apple as the handling fee. It has always been like this， and most of us just didnt know it.

The bone of contention is whether tipping content creators can be regarded as the equivalent of purchasing virtual products. My answer is yes. When you subscribe to a publication， you pay in advance. When you tip the author of a good article， you pay after the fact. In both cases， you are paying for digital content.

If someone would like to give you 50 million yuan （$7.3 million） as a reward for your hard work， would you need to pay taxes？ Yes， of course. It is the same with tipping on social networking apps.

If Apple charged no fees on tipping， then mobile game developers， the biggest sellers of virtual products in the App Store， would take advantage of this loophole and allow users to buy products by tipping rather than using currencies. If it happened， Apple would see its revenue plummet.

In fact， this new rule does not in any way compromise the interests of users. They just cannot accept it on an emotional level. As consumers， they still have the option of buying Android phones rather than iPhones.

As long as the law allows it， any decision that can be made is legitimate and should not be interfered with. Apple can choose to charge certain fees and assume the consequences. As users， we can also refuse to pay.

CON

Li Mengxia iPhone user

If Apple insists on being so arrogant， it will seriously hurt its users loyalty. At the end of the day， users will be the ones to assume the extra fees. For example， if I want to give a tip of 100 yuan （$14.7） to a content creator， I now have to spend 130 yuan （$19.1） if I use iPhones iOS system， but only 100 yuan （$14.7） if I am an Android user. In the long run， more and more users will abandon Apples products and turn to Android smartphones instead.

CON

Zhao Zhanling Lawyer

Users tip digital content providers to show their appreciation of quality content and to encourage authors to create more. In essence， it is a gift. Consumers voluntarily choose to offer the gift after having consumed the content. It is different from paying for digital content in advance， and cannot be regarded as a purchase. Therefore， forcefully charging such a fee infringes on both consumers and content providers legal interests.

There is no ground for Apple to charge this fee. The only reason it has done so is because of its monopoly on the iOS operation system. The move turns Apple into a bully， showing no respect to app developers and users. It is actually an abuse of its role as a platform manager and could lead to unfair competition. Authorities should launch an anti-monopoly investigation into the company. According to Chinas law against unfair competition， no sellers should tie in other products or attach unreasonable conditions against buyerswillingness. Listing tips as an in-app purchase is an unreasonable condition and infringes on consumers legal interests.