The House of Representatives of Arizona voted Wednesday, December 31-29, to pass a bill that requires app stores to allow app manufacturers to use their own payment processing software, avoiding the costs Apple and Google charge .
The vote is a setback for Apple, which opposes it, and a victory for the Coalition for App Fairness, a group representing app manufacturers who are upset about the app stores, which supports the bill.
The legislation still has many challenges to overcome before it becomes state law. First, the Arizona Senate must discuss and pass the legislation. Then the Arizona government, Doug Ducey, would have the choice to veto the bill. If it becomes law, Arizona will have to wrestle with questions, including whether Apple or Google will comply with it, or if it will be disputed in court.
The vote comes weeks after the North Dakota state legislature voted to pass a similar bill.
The Arizona Bill, HB 2005, targeted Apple’s fees by requiring companies that run app stores with more than a million downloads a year to allow apps to offer alternative payment processors, allowing developers to pay 15% fees up to 30%. The bill applies to companies and users in Arizona.
While the bill does not specify businesses, it was clearly aimed at Apple’s App Store, which approves any app used on iPhones, and the Google Play App Store for Android phones, which accounts for 30% of sales of digital goods from Android. apps take. . The discussion of the bill in the Arizona House focused mostly on Apple, with a bit of discussion from Google. The bill released digital software stores for game consoles or music players.
“I think they currently have a monopoly on the market,” the Republican Arizona rep said. Regina Cobb, who sponsored the bill, said. “There’s no one here who does not have a Google Android or Apple phone, I can guarantee it.”
Other lawmakers have opposed the bill on other grounds, including a speedy process, questions about whether it is a federal issue and concerns that the law could be challenged in federal court because it could be in violation of the U.S. Constitution. .
“Arizona is not interested in this fight,” Arizona Democratic Representative Diego Rodriguez said. “We do not have a dog in this fight. What we need to do is focus on policies that protect consumers. This bill does not protect consumers, it protects a $ 1 billion company against another billion dollars- undertaking.”
Apple opposed the Arizona bill, and Kyle Andeer, head of Apple compliance, said during a hearing last week that it amounted to a “government mandate that Apple should give the App Store”.
“This will enable billions of developers to take all the value of the App Store for free – even if they sell digital goods, even if they earn millions or even billions of dollars to do so,” said Andeer.
Apple and Google representatives declined to comment.
The Arizona bill is the latest attempt to regulate Apple’s App Store, which came under fire due to the strict rules and fees for digital purchases, which some software manufacturers say are unfair and competitive.
State legislatures have become a battleground and similar legislation is being considered in states including Georgia and Minnesota.
Arizona’s bill was backed by the Coalition for App Fairness, which includes software companies such as Spotify, Match Group and Epic Games, which, under Apple’s control, has scrapped its App Store and wants Apple to lower its fees, opening iPhones to alternative app stores . , and allows alternative payment processes.
“The Coalition for App Fairness is pleased to see the HB 2005 House section, which will encourage business innovation in Arizona and protect consumer choice. While it is cause for celebration, it is only a first step toward a real playing field for everything, ”said Meghan DiMuzio, executive director of the Coalition for App Fairness.
Last year, Epic Games filed antitrust applications against Apple and Google, which are currently being worked on by the courts, and focused on many of the same issues, such as giving software vendors the option to use their own payment processor.
In October, the House Judiciary subcommittee released a report saying Apple had “monopoly power” over iPhone applications, which are used to generate exorbitant profits.
In 2019, the Supreme Court ruled 5-4 against Apple in a case that opened the possibility of consumer lawsuits against Apple’s app store for the alleged price hike.
The investigation apparently has an effect on Apple’s App Store policy. Late last year, Apple launched a new app that reduced the App Store sales fee from 30% to 15% for companies earning less than $ 1 million a year in the App Store, which addresses complaints.