The Arizona House of Representatives voted Wednesday 31-29 to pass a bill that would require app stores to allow app makers to use their own payment processing software at no charge charged by Apple and Google .
The vote is a setback for Apple, which was against it, and a victory for the Coalition for App Fairness, a group representing app makers angry with the app stores that backed the bill.
The legislation still has many challenges to overcome before it becomes state law. First, the Arizona Senate must discuss and approve the legislation. Then Arizona Governor Doug Ducey would have the choice to veto the bill. If it becomes law, Arizona will have to grapple with questions including how Apple or Google will comply, or whether it would be challenged in court.
The vote comes weeks after the North Dakota State Senate voted against passing a similar bill.
The Arizona Act, HB 2005, focused on Apple’s fees by requiring companies that run app stores with more than a million downloads per year to provide apps with alternative payment processors, allowing developers to allow fees of 15% to 30% avoid. The bill would apply to businesses and users in Arizona.
While the bill didn’t specify companies, it clearly targeted Apple’s App Store, which approves every app that runs on iPhones, and the Google Play App Store for Android phones, which accounts for 30% of Android digital goods sales. apps. . Discussion of the bill in the Arizona House focused primarily on Apple, with some discussion from Google. The bill exempted digital software stores for game consoles or music players.
“I think they currently have a monopoly on the market,” said Arizona State Republican Representative Regina Cobb, who sponsored the bill. “There’s no one here who doesn’t have a Google Android or Apple phone, I guarantee that.”
Other lawmakers have opposed the bill on other grounds, including a rushed trial, asking if it is a federal issue, and concerns that the legislation would be challenged in federal court because it could violate the U.S. Constitution.
“Arizona has no interest in this fight,” said Diego Rodriguez, the representative of the Democratic State of Arizona. “We don’t have a dog in this fight, what we need to do is focus on policies that protect consumers. This bill doesn’t protect consumers, it protects a $ 1 billion company from another multi-billion dollar company.”
Apple opposed the bill in Arizona, and Kyle Andeer, Apple’s Chief Compliance Officer, said at a hearing last week that it amounted to a “government mandate for Apple to give away the App Store.”
“This would allow multi-billion dollar developers to use all of the value of the App Store for free – even when selling digital goods, even making millions or even billions of dollars from it,” Andeer said.
Representatives from Apple and Google declined to comment.
Arizona law is the latest attempt to regulate Apple’s App Store, which has come under fire for its strict rules and fees for digital purchases, which some software makers say are unfair and anti-competitive.
The state legislature has become a battleground, and similar legislation is being considered in Georgia and Minnesota, among others.
Arizona law was backed by the Coalition for App Fairness, which includes software companies such as Spotify, Match Group and Epic Games, which are under Apple’s control of the App Store and want Apple to lower its fees and open iPhones to alternative app stores, and allow alternative payment processes.
The Coalition for App Fairness is pleased to see HB’s 2005 House passage, which will encourage business innovation in Arizona and protect consumer choice. While this is cause for celebration, it is only a first step on the road towards a truly level playing field for all, ”said Meghan DiMuzio, Executive Director of the Coalition for App Fairness.
Last year, Epic Games filed antitrust lawsuits against Apple and Google who are currently working through court, targeting many of the same issues, such as allowing software makers to use their own payment processor.
In October, the House Judiciary Subcommittee released a report that Apple has a “monopoly position” on iPhone apps, which it uses to generate excessive profits.
In 2019, the Supreme Court ruled 5-4 against Apple in a case that opened up consumer lawsuits against Apple’s app store for allegedly high app prices.
The audit appears to have an effect on Apple’s App Store policies. Late last year, Apple introduced a new program that reduced the cost of App Store sales from 30% to 15% for companies making less than $ 1 million per year on the App Store, addressing a number of complaints.