The Arizona House of Representatives passed a major bill this week that, if passed, would require Google and Apple to allow app developers in Arizona to choose their own alternative payment systems.
The House voted 31-29 in favor of the bill (PDF), which does not name one of the major mobile platforms, but nonetheless targets both, as the text specifically applies to a ‘digital application distribution platform’ ‘which has more than 1 million cumulative. download in a calendar year from Arizona users.
The text prohibits platforms from blocking developers in Arizona or users in Arizona from using proprietary in-app payment systems. It also prohibits platforms from retaliating against Arizona consumers or developers for deciding to use a payment system ‘not owned, operated, or affiliated’.
The bill, like North Dakota before, applies to app stores and payment processing services on ‘general hardware’, such as tablets, smartphones, computers and other similar devices, but includes’ special ‘digital distribution platforms for digital applications’ such as game consoles and music players . In short, it’s a small target that means “Google and Apple”, without you even having to mention it. (As written, the bill may also apply to the Mac OS and Windows app stores, but those platforms already do not restrict developers or users in the same way that Android or iOS do.)
It sounds familiar …
The North Dakota Senate last month debated an extremely similar bill, but ultimately voted 36-11 against adopting the measure. Both bills are so similar, mainly because they are promoted by the same organization: the Coalition for App Fairness.
Back in August, Fortnite developer Epic Games has deliberately baited Apple by launching a short-lived alternative in-app payment system for iOS Fortnite players. Apple responded within hours by launching Fortnite from the platform, and Epic was ready. The two are now wrapped up in a high-profile antitrust suit.
Epic is by no means the only firm to have complained about Apple’s app store practices over the past few months, and a dozen other companies, including Spotify, Basecamp and Protonmail, have joined in launching the coalition in September. . The lobby group, which now boasts more than 45 members, has proposed similar legislation in several other states; Arizona is the first where any legislature has tabled a bill.
Both Apple and Google have sent their own lobbyists to Arizona to try to stop the bill. “This bill tells Apple that it can not use its own cash register and collect a commission from the store we built,” Apple CEO Kyle Andeer told Arizona during a hearing in February.
Support for the Arizona House bill did not divide along party lines as one would expect for an antitrust-related bill. While federal-level monopolistic reform is currently likely to come from Democrats, most support for the Arizona bill comes from Republicans. Of the 31 votes in favor, 27 come from Republican representatives, and four from Democrats. The score was almost exactly reversed among the 29 “no” votes, where 25 came from Democrats, and four from Republicans.
“I think they currently have a monopoly on the market,” Rep. Regina Cobb, a Republican who sponsored the bill, said. “There’s no one here who does not have a Google Android or Apple phone, I can guarantee it.”
Alternatively, “Arizona is not interested in this fight,” 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.”