Apple and Fanhouse are in a Run-in for Apple Tax

Apple and the platform Fanhouse are at odds over whether Apple should earn a part of in-app payments to authors. The incident demonstrates how poorly Apple understands the creator economy, with the likely result being less money in the pockets of artists — and more money in the wallets of one of the world’s most profitable firms.

The platform will be thrown out of the App Store in August, according to the founders of Fanhouse — which is effectively OnlyFans without the nuance — if it doesn’t start paying creators 30 percent of the revenues paid through the iPhone app. Breadwitchery, one of Fanhouse creators, claims that the cut would result in her losing two months of rent from her previous earnings.

The company doesn’t have many alternatives for retaliation, so it’s launching a campaign today to persuade Apple to relax its limits on creator royalties. Fanhouse is the latest startup to clash with Apple over App Store restrictions widely seen as oppressive. Sure, it’s a small app, and its removal won’t necessarily cause Apple problems, but the case illustrates the difficulties that creator-focused apps face on the App Store.

As the creator economy grows, the regulations indicate Apple will be making more money from individuals and enterprises. Fanhouse, which debuted in 2020, initially eluded the App Store’s gatekeepers by accepting payments via the web. Now that Apple has seen the profit potential, it has offered Fanhouse the same request it has given (nearly) everyone else: pay up or get kicked out of the shop.

Because the app only gets a 10% cut on its own, the platform’s founders may soon be earning significantly less. Rice claims she would be fair with Apple taking a 30% portion of Fanhouse’s profits.