Apple and Tencent Reach Deal to Let WeChat Users Dole Out Tips

By Yoko Kubota and Alyssa Abkowitz 

BEIJING-- Apple Inc. and Chinese technology giant Tencent Holdings Ltd. have settled their tiff over tips, allowing users of Tencent's popular WeChat messaging app to resume giving monetary gifts to their favorite video-streaming stars and content creators.

The tipping function was suspended last year after a dispute between Apple and Tencent on the terms. Apple contended the tips amounted to in-app purchases, entitling it to a 30% cut of the amount transferred. Tencent balked, saying it didn't get any revenue itself and provided the service at no cost as a means to build engagement.

At a developers' conference in Guangzhou on Monday, WeChat creator Allen Zhang said the two companies had reached an accord that will allow transfers to resume. He said WeChat will tweak the platform so the tip will be paid to individual content creators, but didn't provide other details.

"In the past, companies like Apple might have had a difficult time understanding China-specific features," Mr. Zhang said, according to a transcript of his remarks provided by Tencent. "We now all share a mutual understanding and we'll soon bring back the "tip" function."

Apple representatives had no immediate comment.

Apple changed its App Store rules in September to allow users to send money gifts to other users without Apple taking any cuts. But gifts must be just that; any content or services contingent on users giving a "gift" will be considered a purchase and Apple will take a cut.

Tencent didn't respond to requests for details of the new arrangement, and it wasn't clear if Apple will get any money from the transfers.

Apple has taken several steps recently to protect its market and its standing in China, such as introducing a built-in ability on its operating system to scan QR codes that are ubiquitous in China. It also created a new managing director post to oversee China operations.

Apple last year also shut down hundreds of apps that allowed users to access blocked websites.

A recent editorial in the state-run People's Daily held up Apple as a model corporate citizen, contrasting the company favorably with hotel chain Marriott International Inc. and other companies which recently have listed Taiwan, Tibet, Macau and Hong Kong as countries separate from China on their Chinese websites.

Xiao Xiao contributed to this article.

(END) Dow Jones Newswires

January 15, 2018 07:00 ET (12:00 GMT)

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