Apple does not have to allow App Store alternatives on iOS after the North Dakota account failed

A North Dakota bill that would drastically change the way app store operators like Apple and Google manage their digital markets could not garner enough votes, and voted 11-36 on Tuesday, according to the state legislature. North Dakota House of Representatives Karla Rose Hanson.

The bill, SB 2333, sparked considerable controversy last week when a committee hearing drew attention to corporate lawyers and lobbyists, experts and Apple critics arguing both the argument and the contradictory consequences of the proposed legislation.

The bill would ban any company that invests in software distribution more than $ 10 million in annual revenue by imposing rules on developers that stipulate that they use only one app store, such as the App Store or the Google Play Store, and that they the app store owner’s preferred payment system. Using Apple’s or Google’s payment system, businesses in turn can take 30 percent of most sales, according to their long-standing revenue-sharing policy regarding app sales and in-app purchases.

The requirement of developers to use the App Store and Apple’s own payment system are pillars of the iPhone manufacturer’s mobile business and are largely responsible for the continued financial success of the App Store. The App Store is estimated to have generated more than $ 64 billion in revenue last year. (Google does allow alternative app stores on Android, but the company requires users to click through security alerts to download and use such software.) Yet developers have long complained about Apple’s grip on the flow of revenue on iOS, and critics claim that these change rules are ever applied consistently and that Apple grants exemption on a case-by-case basis.

Although the bill would only determine how companies like Apple operate within the state of North Dakota, Apple’s broad language may have forced systematic changes to its business nationwide. The success of the legislation could also have inspired other states to follow suit with similar efforts to regulate the relationship between app stores and developers, although this is apparently already underway despite the failure of SB 2333.

In the argument against SB 2333, Apple’s chief privacy engineer, Erik Neuenschwander, testified that the bill ‘threatens to destroy the iPhone as you know it’, arguing that it ‘violates the privacy, security, safety and performance provided by the iPhone built-in will undermine. , “According to the Bismarck Tribune. “Simply put, we work hard to keep bad apps out of the App Store; (the bill) can require us to let them in, ”Neuenschwander concluded.

The legislation is just one of a growing number of state bills, which now include proposed bills in Arizona and Georgia, that seek to place limits on the power of Apple and co-owners of app stores. A The New York Times report this weekend linked the bills to a multi-state lobbying effort by the Coalition for App Fairness, an industry group formed last fall, consisting of Fortnite creator Epic Games, Tinder parent company Match Group, Spotify and dozens of other companies.

For years, CAF members have opposed the App Store and Apple’s mandate to take 30 percent of all app sales and in-app purchases. The group now devotes itself to supporting legislation aimed at Apple and its App Store policies.

SB 2333 was proposed by Senator Kyle Davison (R-Fargo) after the state senator was approached by Lacee Bjork Anderson, a lobbyist at the firm Odney Public Affairs in Bismarck, North Dakota, who gave a draft proposal to Davison. Anderson, it appears, was appointed by both the CAF and Epic. Epic also sues Apple and Google after both companies were removed Fortnite last August, following Epic’s decision to include its own in-app payment system in the iOS and Android versions of the Battle Royale hit. (Epic was not the only CAF member to testify in support of SB 2333; Basecamp. Match Group, and Tile also all testified, a CAF spokesman said. The edge.)

In a tweet, Epic CEO Tim Sweeney acknowledges that Epic and the Coalition for App Fairness participated in the ongoing lobbying work. “North Dakota’s effort to combat monopolies in the app store is tremendous for consumers and developers,” Sweeney wrote. “The Coalition for App Fairness organized the outreach, lobbying and participation in developers. Can’t get credit for it, but Epic is proud to be a part of it! ”

Apple did not immediately respond to a request for comment.

Update February 16, 20:20 ET: Explain that the Coalition for App Fairness as a group helped draft and support North Dakota’s Senate Bill 2333, with Epic only one of the many members who testified.