Mike Peterson
A bill that could force Apple and Google to allow third-party payment platforms for in-app purchases on the App Store has been introduced in Arizona and is slated for a vote in the state's House of Representatives.
The piece of legislation is an amendment to Arizona House Bill 2005. Specifically, it "restricts the ability of certain digital application distribution platforms to require use of a specific in-application payment system."
In that way, it's similar to the bill introduced on February 10 in North Dakota, that ultimately failed. However, HB 2005 stops short at requiring tech companies from allowing outside app stores, and only applies to in-app payment systems.
The HB2005 amendment prohibits companies whose downloads from Arizona users exceed 1 million from requiring specific in-app payment systems as the sole way to accept payments. It also bars companies from retaliating against app makers who do use a third-party payment system. Like the North Dakota legislation, HB 2005 also features a specific carve-out for gaming consoles or music players, using very similar language to the North Dakota exception.
State Reps. Regina Cobb and Leo Biasiucci, the co-sponsors of the legislation, wrote in an op-ed that the bill would end the "monopoly" that Apple and Google have on their respective mobile ecosystems.
"The legislation would allow web developers to accept payments for their apps without going through Apple or Google's app stores, bypassing the app tax and reducing the cost for consumers without compromising security or safety," the representatives wrote.
Currently, third-party payment systems are prohibited under Apple's App Store Guidelines. Back in 2020, Epic Games implemented a system to bait Apple into removing "Fortnite" from the App Store, sparking an ongoing legal feud.
The legislation in North Dakota, which failed, was also given in draft form to lawmakers in the state by an Epic Games lobbyist. At the time, an Apple spokesperson said that the bill could "destroy iPhone as you know it" and would carry significant consequences for privacy, security, safety, and performance.
During an Arizona House Appropriations hearing Monday, Apple representatives touted the way the App Store democratized software by referring back to times when developers had to pay more to build and distribute apps.
Apple's 30% cut of in-app purchases has come under fire from app developers like Epic Games and groups like the Coalition for App Fairness, which rallies against what they claim are unfair app marketplace policies. In late 2020, Apple debuted a new program reducing that fee to 15% for developers making less than $1 million on the App Store.
The Arizona House Committee passed the bill as amended. It's now set to go before the entire Arizona House for a full vote.
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54 Comments
What a nightmare for Apple. I suppose they need to invest millions more dollars on state-level lobbying now. Not great that Epic got ahead of them, convincing a couple of legislators to include Epic's language into a bill. Surely Apple can out wine-and-dine any "undecided" representatives. I don't know what they would do it this passes--except go to Congress to prohibit state-level regulation in this sphere.
"HB 2005 also features a specific carve-out for gaming consoles or music players, using very similar language to the North Dakota exception." How handy...and why the bill wouldn't be constitutional even if the idiots in Arizona passed it.
Just another action taken to appear ‘woke’. Supported by old people who want to feel relevant—instead of sharing their actual wisdom with the youth they exchange it to feel like they aren’t old.
Once more it's silly season in the various state legislatures. This bill will go nowhere but some virtue-signaling idiot Republican legislator will get to tell his/her constituents that he/she tried to do something about big bad Apple kicking treason-enabling Parler off its platform. I'm old enough to remember when conservatives vehemently insisted that private businesses should get to do business with whomever they please, e.g. bakers and gay weddings.
NB the AZ Legislature is also contemplating measures to greatly restrict mail-in ballots and as well to allow the Lege to over-rule the will of the people if it doesn't like who they vote for in a presidential race. Maybe someday the voters of AZ will wake up to the utter contempt in which the state's Republican politicians hold them.
So, if this passes, developers can cut Apple out completely from their revenue stream? Do these developers get to be in the App Store and pay absolutely no compensation to Apple for providing the platform on which to hawk their wares? If that’s the case then why would Apple continue to support the App Store since they get no income from it? What would happen if Apple were to simply shut down the App Store, allow sideloading, and let developers fend for themselves in terms of setting up their own stores, their own payment platforms, and their own advertising?
Are App Stores on their way out and we return to the 1980s when developers were on their own in selling their wares? It sure seems like it.