The Arizona Senate was scheduled to vote on a unique and controversial bill on Wednesday that would have imposed far-reaching changes to how Apple and Google operate their respective mobile app stores, particularly by allowing alternative payment systems in the app. But the vote never took place, after being transferred to the timetable without explanation. The Verge so every other bill on the schedule is debated and voted on over the senate’s live stream, but Arizona HB2005, listed first on the agenda, never came up.
A notable Apple critic is now accusing the iPhone maker of intervening to stop the vote, saying the company hired a former chief of staff to the Arizona government, Doug Ducey, to mediate a deal that prevented the bill from being heard in the Senate and eventually voted on. This is after the legislation, an amendment to the existing HB2005 law, passed the Arizona House of Representatives earlier this month in a landmark 31
“The big show turned out to be a no show. The bill was killed in the middle of the air while it was on the agenda with a backroom deal. Apple has hired the governor’s former chief of staff, and word is that he brokered an agreement to prevent this from even being heard, “tweeted this afternoon David Heinemeier Hansson, a fierce Apple critic who testified in support of HB2005.
Apple declined to comment.
It was known before today’s scheduled vote that both Apple and Google had hired lobbyists to fight the bill, according to a report from Protocol, because it directly threatened the companies’ industry standard app store commission of 30 percent. If the Arizona bill passed the Senate and was signed into law by Ducey, it would have made the state a haven for app makers looking to move away from the App Store and Google Play Store payment systems, which are the mechanisms companies use to take their cuts of everything. app sales and in-app purchases of digital goods.
It could also have caused all sorts of extra headaches for both companies by forcing them to either introduce a patchwork system for state-specific enforcement, or by potentially forcing them to stop doing business in Arizona altogether while opening the door to lawsuits against the state.
In testimony in front of the Arizona House earlier this month, Apple’s chief compliance officer, Kyle Andeer, claimed that the App Store provides enough value for developers to justify the 30 percent cut. The commission has been described by some special interests as a “payment processing fee” – as if Apple is just swiping a credit card. It’s very misleading. Apple gives developers a huge amount of value – both the store for distributing their apps worldwide and the studio for “That’s what the commission reflects,” Andeer said in a written testimony.
“Still, this bill tells Apple that it can not use its own checkout path (and collect a commission) in the store we built,” he added. “This will allow billions of developers to take the entire App Store value for free – even if they sell digital goods, even if they make millions or even billions of dollars doing so. The bill is a government mandate given by Apple to the App Store. ”
It is worth noting that the bill also met with significant opposition in Arizona House not from big business-loving Republicans, but instead from Democrats. A number of Democrats publicly opposed the bill, voting against it on the grounds that it was potentially unconstitutional to disrupt interstate trade, and also that it involved Arizona in a legal battle in California between game developer Epic Games and both Apple and Google over the removal of Fortnite from The Android and iOS platforms.
The bill, which was primarily sponsored by Representative Regina Cobb (R-5), is one of many that have appeared in state lawmakers around the country challenging Apple’s and Google’s long-standing policy on the mobile app economy. These bills can be traced back to a growing antitrust press against Big Tech mounting in both Europe and Washington, DC, and they represent a new local and state front in the ongoing battle for the technology industry’s great power and the methods legislators may have to try and govern in Other arenas include California, where Epic started its own fight, and the EU. which started antitrust investigations in the App Store and Apple Pay due to competition requirements.
Both Apple and Google operate the two most dominant app stores in the world, and while the Google Play Store allows alternative app stores and thus alternative payment systems, Apple does not. This means that all digital purchases on iOS are subject to Apple’s 30 percent mandate cut, or in some cases a reduced 15 percent cut, although Apple has been criticized for cutting secret deals, such as those they have made with Amazon over Prime Video subscriptions. and later in-app purchases, to exempt certain types of purchases when it is strategically convenient.
Both companies in the last six months announced changes in the commission structure that allow smaller developers, who represent the vast majority of app manufacturers on both Android and iOS, to claim a reduced cut of 15 percent, although it has done little to append the app store. critics.
These antitrust proposals, such as HB2005, have largely been worked on by the Coalition for App Fairness (CAF). CAF is an industry group formed last year, consisting of Epic, Spotify, the Tinder parent company Match Group, and dozens of other companies that have become increasingly dissatisfied with the status quo for the mobile app economy and the app store’s owner company developer agreements. Some of these companies, such as Spotify, have for years complained about unfair treatment by Apple and have accused the company of prioritizing its own software over competitors through the use of App Store rules and iOS requirements.
CAF began lobbying lawmakers earlier this year, first in North Dakota and now in several states, including Arizona, to initiate the introduction of bills such as HB2005. While the North Dakota bill failed, Arizona was seen as a more promising alternative because it only focused on in-app payment systems, while North Dakota also mandated that operating system owners also allow alternative app stores.
But the fate of the law is now in doubt, and it is not immediately clear what happened. Rep Cobb, the bill sponsor, did not respond to a request for comment. The governor’s office in Arizona and the office of Arizona State Senate Majority Leader Rick Gray (R-21) also did not immediately respond to requests for comment.