A North Dakota bill that would have drastically changed the way app store operators like Apple and Google manage their digital markets failed to garner enough votes, failing in the state senate by 11 to 36 votes on Tuesday, according Karla Rose Hanson, member of the North Dakota House of Representatives.
The bill, SB 2333, sparked considerable controversy last week when a committee hearing drew the attention of Apple’s corporate lawyers and lobbyists, experts and critics, arguing both for and against the potentially far-reaching consequences of the proposed legislation. .
The project would have barred any company in the software distribution business that earned more than $ 10 million in annual revenue by imposing rules on developers who dictated that they should use only one app store, such as the App Store or Google Play Store , and should use the app store owner’s preferred payment system. Using Apple’s or Google’s payment system, in turn, allows these companies to obtain 30 percent of the majority of sales, according to their long-standing revenue sharing policies on app sales and in-app purchases.
Requiring developers to use the App Store and Apple’s own payment system are the pillars of the iPhone manufacturer’s mobile business and largely responsible for the App Store’s continued financial success. The App Store is estimated to have generated more than $ 64 billion in revenue last year. (Google allows alternative app stores on Android, but the company requires users to click on security notices to download and use this software.) However, developers have long complained about Apple’s control over the revenue stream on iOS, with critics stating that never – the change rules are applied inconsistently and Apple grants exemptions on a case-by-case basis.
Although the bill only dictated how companies like Apple operate in the state of North Dakota, the broad language of the bill may have forced Apple to make systematic changes to its businesses across the country. The success of the legislation may also have inspired other states to follow suit with similar attempts to regulate the relationship between app stores and developers, although this appears to be already underway, despite the failure of SB 2333.
In arguing 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 would harm privacy, security, protection and privacy. performance integrated into the iPhone by design, “according to Bismarck Tribune. “In short, we work hard to keep bad apps out of the App Store; (the bill) may require us to let them in, ”concluded Neuenschwander.
The legislation is just one of an increasing number of state bills, which now include bills in Arizona and Georgia that seek to put limits on the power of Apple and other app store owners. one The New York Times This weekend’s report linked the bills to a multi-state lobbying effort by Apple’s fiercest critics Fifteen days the creator Epic Games leading the charge.
SB 2333 was proposed by Senator Kyle Davison (R-Fargo) after the state senator was approached by Lacee Bjork Anderson, a lobbyist for Odmar Public Affairs based in Bismarck, North Dakota. Anderson, it seems, was hired by Epic, the Times reported. Epic is also suing Apple and Google after both companies withdrew Fifteen days Last August, following Epic’s decision to include its own in-app payment system in the iOS and Android versions of the hit Battle Royale.
Anderson was also paid for by the Coalition of App Fairness, an industry group formed last fall consisting of Epic and other app makers, such as the parent company of the Tinder Match Group and Spotify, which have been protesting against the App Store and Apple’s order that 30% of all app sales and in-app purchases.
In a tweet, Epic’s CEO Tim Sweeney acknowledged the participation of Epic and Coalition for App Fairness in the ongoing lobbying efforts. “North Dakota’s effort to combat app store monopolies is incredible for consumers and developers,” wrote Sweeney. “Coalition for App Fairness organized developer disclosure, lobbying and participation. I can’t take credit for this, but Epic is proud to be a part of it! ”
North Dakota’s effort to combat app store monopolies is incredible for consumers and developers. Coalition for App Fairness organized developer outreach, lobbying and participation. I can’t take credit for this, but Epic is proud to be a part of it! Http://t.co/Zi0iDMpkaz
– Tim Sweeney (@TimSweeneyEpic) February 16, 2021
Apple did not immediately respond to a request for comment.