Apple to Charge 30% Tax on NFT Sales

Apple the Web2 company with a vested interest in keeping Web3 technology down announced it will allow NFTs sales. Each sale will include a 30% App Store fee meaning Apple users can now buy NFTs through apps available on their App store.

This is the standard 30% commission Apple charges for all in-app sales and is in line with the commission fees charged by the Google Android app store. 

However, the exorbitant commission is stopping NFT marketplaces from selling through apps listed on the Apple app store and Google Play.

The app tax has not gone down well with the NFT community, where a regular NFT marketplace charges around 2.5% commission. Many within the Web3 and NFT community have vented their anger, with Epic Games CEO Tim Sweeney and Magic Eden founder Sidney Zhang criticizing the Apple announcement.

Epic Games CEO Tim Sweeney

CEO of Epic Games Tim Sweeney was not impressed with Apple’s new fees. He did not hold back in a tweet in which he states, that Apple’s commission is “crushing another nascent technology that could rival its grotesquely overpriced in-app payment.”

https://twitter.com/TimSweeneyEpic/status/1573377990100238338?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1573377990100238338%7Ctwgr%5E82efd6cb185fdd789d426a57873f60a6245831e5%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fcointelegraph.com%2Fnews%2Fgrotesquely-overpriced-apple-s-app-store-wants-30-cut-on-nft-sales

Epic Games has a history with Apple. In August 2022, Fortnite, the company’s flagship game, was removed from the Apple app store after the company tried to bypass Apple fees when selling in-game items.

As a result, Epic Games began legal proceedings concerning “Apple’s use of a series of anti-competitive restraints and monopolistic practices in markets.”

Commission fees an obstacle for NFT start-ups.

Some see the commission as a roadblock set up to discourage Web3 game developers and NFT projects, many of which are start-ups with a limited budget. It could further spur others already listed on the app store to reappraise their situation.

Sidney Zhang, cofounder and CTO of Magic Eden NFT marketplace, speaking to The Information, stated that commissions are the reason most “NFT marketplaces don’t even think about selling through an app store”.

Look at the larger picture.

Not all in the community are up in arms. Some state we should look beyond the 30% commission fee on app purchases.

Gabriel Leydon, CEO at Limit Break, asked people to look at the bigger picture, stating in a tweet that the move “could put an ETH wallet in every single mobile game onboarding 1B+ players.”

https://twitter.com/gabrielleydon/status/1573432171972685826

Afterthoughts

As always, there are varying views on any topic.

One side says the tech giant has again shown its true colors with the ‘app tax’ on NFT sales. However, this is to be expected from Apple. We are seeing a new technology that has the potential to rival the big Web2 companies. They are not going to take this lying down.

On the other hand, some regard this as standard practice for Apple. It charges a 30% commission on all transactions, and it is not singling out NFTs. They think the potential for NFT adoption must be considered when judging the announcement.

What are your thoughts on Apple’s app tax? Leave a comment below.

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