The Arizona State Senate was scheduled to vote on an unprecedented and controversial bill on Wednesday that would have imposed far-reaching changes in how Apple and Google operate their respective mobile app stores, specifically allowing for alternative payment systems. in the app. But the vote never took place, having been passed over in programming without explanation. The Verge I watched all other projects on the schedule debated and voted on the Senate live broadcast, but Arizona HB2005, listed first on the agenda, never made it.
A notable Apple critic is now accusing the iPhone maker of intervening to prevent the vote, saying the company has hired a former chief of staff to Arizona governor Doug Ducey to broker a deal that prevented the project from being heard on the Senate and, finally, voted on. That was after the legislation, an amendment to the existing HB2005 law, was passed by the Arizona House of Representatives earlier this month in a historic vote from 31 to 29.
“The big show ended up being one on the show. The project was killed in the air while it was on the agenda for a backstage deal. Apple hired the former governor’s chief of staff, and he is said to have brokered an agreement to prevent this being heard, ”David Heinemeier Hansson, a fierce critic of Apple who testified in support of HB2005, tweeted this afternoon.
Apple declined to comment.
It was well known before the vote scheduled for today that Apple and Google hired lobbyists to fight the bill, according to a report by the Protocol, because it directly threatened the company’s 30 percent industry-standard app store commission. If the Arizona bill was passed in the Senate and sanctioned by Ducey, it would have made the state a haven for app makers looking to bypass the App Store and the Google Play Store payment systems, which are the mechanisms that companies use to get your cuts from all app sales and in-app purchases of digital products.
It could also have caused all sorts of additional headaches for both companies, forcing them to institute a state-specific inspection patchwork system, or potentially forcing them to stop doing business in Arizona at the same time. it opened the door for lawsuits against the state.
In testimony before the Casa do Arizona earlier this month, Apple’s chief compliance officer, Kyle Andeer, argued that the App Store provides enough value for developers to justify the 30 percent cut. “The commission was described by some special interests as a ‘payment processing fee’ – as if Apple were just swiping a credit card. This is terribly misleading. Apple offers developers an enormous amount of value – both the store to distribute their applications around the world and the studio to create them. This is what the commission reflects, ”Andeer said in a written statement.
“Still, this bill tells Apple that it cannot use its own cash (and charge a commission) in the store we build,” he added. “This would allow billion-dollar developers to take all the value out of the App Store for free – even if they were selling digital products, even if they were earning millions or even billions of dollars from it. The bill is a government order for Apple to donate the App Store. ”
It is important to note that the bill has also faced considerable opposition in the Arizona House, not by Republicans who love big business, but by Democrats. Several Democrats publicly opposed the bill and voted against it, claiming it was potentially unconstitutional for interfering in interstate commerce and also that it filed Arizona in a legal dispute in California between game developer Epic Games and Apple and Google over removing Fifteen days from Android and iOS platforms.
The bill, which was sponsored mainly by Rep. Regina Cobb (R-5), is one of many that have emerged in state legislatures across the country challenging Apple’s and Google’s longstanding application economy policies furniture. These bills can be traced back to the growing antitrust pressure against mounting Big Tech in Europe and Washington, DC, and they represent a new local and state front in the ongoing struggle over the technology industry’s extraordinary power and any methods. that lawmakers can employ to try and reign in. Other arenas include California, where Epic launched its own fight, and the European Union. which launched antitrust investigations on the App Store and Apple Pay on anti-competitive claims.
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 therefore alternative payment systems, Apple does not. This means that all digital purchases on iOS are subject to Apple’s mandatory 30% cut or, in some cases, a reduced 15% cut, although Apple has been criticized for closing secret deals, like those it did with Apple. Amazon through Prime Video subscriptions and later on – app purchases, to exempt certain types of purchases when it is strategically convenient.
Both companies have announced changes in the commission structure over the past six months that allow smaller developers, who represent the vast majority of Android and iOS application makers, to claim a reduced cut of 15 percent, although this has done little to ease the critical app store.
These antitrust proposals, like HB2005, are largely the work of the Coalition for App Fairness (CAF). CAF is an industry group formed last year that consists of Epic, Spotify, Tinder parent Match Group and dozens of other companies that are increasingly dissatisfied with the status quo of the mobile app economy and the owners’ strict developer agreements app stores. Some of these companies, like Spotify, have for years complained about Apple’s unfair treatment and 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 instigate the introduction of bills like HB2005. Although the North Dakota bill failed, the Arizona bill was seen as a more promising alternative because it focused exclusively on in-app payment systems, while the North Dakota bill also required operating system owners to allow retailers. alternative applications as well.
But the fate of the project is now in question, and it is not immediately clear what happened. Deputy Cobb, the project’s sponsor, did not respond to a request for comment. The cabinet of the governor of Arizona and the cabinet of the majority leader in the Arizona State Senate, Rick Gray (R-21), also did not immediately respond to requests for comment.