While a US bill banning or forcing a sale of TikTok finally passed recently after making news for almost four years, the ByteDance-owned company might actually get itself banned first. Screenshots show that it might be circumventing Apple App Store policies by providing an option to buy “coins” on the web instead of in-app purchases to get around Apple’s massive commission.

Widely shared screenshots show that TikTok is offering some users a discount on buying coins (that can be used to reward creators on the platform) for a discount if they are purchased on TikTok.com.

TikTok Is Trying to Bypass Apple Play Store Fees

“Try recharging on tiktok.com to avoid in-app service fees,” said the text some TikTok users saw on the app. It adds, “You can save the service fee and get access to popular payment methods.”

While trying to purchase the coins through TikTok.com, the user is guided to an interface that says, “Save around 25% with a lower third-party service fee” by using the option.

Apple charges a fee on in-app purchases which is typically around 25-30%. In the past also companies have tried to circumvent these charges by sneakily directing users to make a purchase on the web instead of in-app purchases. For instance, Spotify and Apple have been at loggerheads over the issue for quite some time now.

The most famous (or rather infamous) case involved Epic Games which publishes the popular Fortnite game and tried offering discounts to users for making purchases outside the Apple ecosystem.

The move did not sit well with Apple, as well as Alphabet and both booted Fortnite from the App Store and Play Store respectively.

TikTok is playing with fire, though some analysts like Bloomberg’s Apple guru Mark Gurman are arguing that Apple wouldn’t remove such a popular app over such an infraction.

Epic Games Founder Wonders If Apple Would Also Ban TikTok

Meanwhile, Tim Sweeney, the founder and CEO of Epic Games, took a swipe at Apple as reports of TikTok bypassing its App Store policies surfaced. He tweeted, “Add Amazon, Roblox and most of the top games in Southeast Asia to the list of apps Apple would have to ban if it enforced its stated policies equally, as they claim to do.”

Bigger companies have figured out newer ways to bypass the fees that Apple and Google charge for in-app purchases. For instance, when Twitter (now X) started charging for verified accounts, it kept the pricing at $11 per month on the app and $8 on the web. Additionally, it offered an annual subscription for a discounted price of $84 but it was only available on the web.

Later Meta Platforms also followed a similar approach and offered subscriptions for a lower price if taken on the web.

Apple Earns Hefty Fees from App Store

So far, Tiktok is offering the option to buy coins on the web to only a limited number of users. While we don’t know for sure, it’s speculated that these are users who have spent a lot of money on the app.

So far, neither TikTok nor Apple have responded to the apparent bypassing of App Store fees. However, we should expect a comment soon as billions of dollars of fees are at stake.

While Apple does not provide a breakdown of the fees it earns from the App Store, its Services business – which includes App Store fees – has been growing at a brisk pace. While Apple’s revenues fell YoY in the fiscal year 2023, Services revenues rose over 9% YoY to $85.2 billion. Also, the Services business is hugely profitable and its cost of sales was a mere $24.8 billion on revenues of $85.2 billion.

While it remains to be seen if Apple goes to the extent of banning TikTok – which is among the top three most downloaded apps in the US – the popular short video app risks being banned from the country altogether.

President Joe Biden Has Signed the Bill That Could Ban TikTok

President Joe Biden has signed the bill that could lead to a ban on TikTok in the US. While the bill was in cold storage, House Republicans managed to include the TikTok ban as part of the massive Uniparty foreign aid package that Biden proposed for Ukraine, Israel, and Taiwan.

The US, along with several Western countries see TikTok as a security threat. To be sure, there are genuine concerns over TikTok being a security threat as, according to Chinese law, ByteDance could be forced to assist in national intelligence efforts, likely including sending US user data to the government. While ByteDance has denied it would ever do so, the assertion has failed to cut ice with many governments globally.

India banned TikTok in 2020 after a border clash with China while countries like the UK, Canada, and Australia have barred government employees from using TikTok.

Concerns over TikTok sharing data with China gained further impetus after multiple former TikTok employees came forward with allegations that the social media service’s operations were closely intertwined with their Chinese parent company, ByteDance, during their tenures, casting serious doubt on the company’s assertions of autonomy.

US-China Tensions Might Only Escalate in the Future

Whether the US bans TikTok or forces it to sell a stake, it would only add fuel to the ongoing US-China tech war as China has signaled that it won’t allow a forced sale.

Relations between the world’s two biggest economies have already been strained over multiple issues including over the US ban on exports of high-end chips to China over possible military use.

It is not only the US that is worried about how a company with Chinese roots would use the data of its citizens. China has been even more protective and Tesla recently partnered with Baidu for data mapping, apparently to get approval to offer its full self-driving (FSD) functionality in the country.

As for the App Store policies, it would not be the first time that the hefty commissions are being questioned. While Apple and Alphabet maintain that they are not creating monopolies, users have few options to bypass the hefty fees. Small app developers are especially at the mercy of these Big Tech companies as being shunted out of the stores could lead to an imminent closure for many.

This time around though, Apple is confronted with a giant in the form of TikTok which is trying to avoid App Store fees. It remains to be seen upto what extent the Cupertino-based company retaliates against TikTok – if at all it does take some action.