© Tada Images/Shutterstock App Store icon

Like most billion-dollar corporations, Apple’s ultimate aim is to continue on a growth trajectory and explore new ways of making money. While Apple started making most of its money from hardware sales, it quickly understood the money-making potential held by apps and services. Therefore, despite earning billions of dollars from App Store sales commissions, analysts indicated that Apple would gradually increase the number of ads it displays on the App Store. Interestingly, while Apple has been showing ads on iPhones and iPads for nearly half a decade, most of them were relatively inconspicuous and appeared only when people looked up certain things.

In the initial phases of Apple’s ads rollout, the company mostly used these ad slots to promote its subscription-based services. Today, however, Apple has monetized the platform and charges significant money from app developers to promote their products on the app store. While Apple has been trying out this model for a while now, the company recently made a significant change to the App Store layout intending to let it display even more ads, potentially generating more ad revenue. These new ad slots, however, came with a major problem. People began noticing that these slots were increasingly used to promote gambling apps. Following a massive online backlash, the company has temporarily stopped displaying these ads on the platform, it confirmed to MacRumors.

Apple’s App Store Ad Conundrum

© Tada Images/Shutterstock App Store icon

When Apple changed the layout of the App Store to increase the number of ads displayed on the platform, many of these slots were seemingly purchased by developers who make gambling apps. And once the new App Store layout went live for iPhone users, Apple began prominently displaying these gambling apps. Many people — including app developers — who saw these ads quickly took to social media to express their disappointment and outrage. A major issue people had with these ads was that many of them were of low quality and often appeared on irrelevant search results.

Following a massive online backlash, Apple says it had paused ads promoting gambling and a “few other categories” from appearing on App Store product pages. Note that only these questionable ads have disappeared from the new ad slots. The slots themselves remain there and continue to display ads for other app categories. Apple’s move to take money from gambling apps has also resulted in many people accusing the company of being greedy. They also blamed Apple for moving away from the ethos held by its former CEO, Steve Jobs.

Apple’s ad strategy has been controversial for a long time, and the latest development has only led to more accusations about the company indulging in anti-competitive behavior. Commenting on Apple’s latest ad push, legal expert Florian Mueller opined that these App Store ads are part of Apple’s strategy of increasing the effective app tax rate wherein app developers are paying from their own pockets to buy ad space on their own app pages.

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