The Arizona House of Representatives voted Wednesday from May 31-29 to pass a bill that will require app stores to allow app makers to use their own payment processing software, avoiding the charges Apple charges and Google.
The vote is a setback for Apple, which opposed it, and a victory for the Coalition for the Enforcement of Justice, a group that represents annoying app makers with app stores, which supported the bill.
Legislation still has many challenges to overcome before it becomes state law. First, the Arizona Senate must discuss and pass legislation. Then Arizona Gov. Doug Ducey would have a chance to veto the bill. If it becomes law, Arizona will have to deal with issues that include how Apple or Google will comply, or whether it would be challenged in court.
The vote comes weeks after the North Dakota state senate voted against passing a similar bill.
Arizona’s HB 2005 bill targeted Apple’s tariffs by requiring companies that run app stores with more than a million downloads a year to allow apps to offer processors. alternative payments, which allows developers to avoid rates ranging from 15% to 30%. The bill would apply to Arizona businesses and users.
While the bill did not specify any business, it was clearly aimed at Apple’s App Store, which approves any app that runs on iPhones, and the Google Play app store for Android phones, which takes 30% of digital product sales from Android apps. . The discussion of the bill at Arizona House focused primarily on Apple, with some discussions about Google. The bill exempted digital software stores for game consoles or music players.
“I think they have a monopoly on the market right now,” said Arizona State Republican Representative Regina Cobb, who sponsored the bill. “There’s no one here who doesn’t have a Google Android or Apple phone, I guarantee it.”
Other lawmakers opposed the bill for other reasons, including a hasty lawsuit, questions about whether it is a federal issue, and concerns that the legislation would be challenged in federal court because it could conflict with the U.S. constitution.
“Arizona has no interest in this fight,” Arizona State Democrat Representative Diego Rodriguez said. “We don’t have any dogs 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 from another $ 1 billion company. of dollars “.
Apple opposed the Arizona bill, and Kyle Andeer, Apple’s chief compliance officer, said in a hearing last week that it amounts to a “government mandate for Apple to cede to the App Store.”
“This would allow $ 1 billion developers to take all the value of the App Store for free, even if they sell digital products, even if they make millions or even billions of dollars,” he said. Andeer.
Representatives from Apple and Google declined to comment.
Arizona’s bill is the latest effort to regulate Apple’s App Store, which has been the focus of its strict rules and tariffs for digital purchases, which some software makers say are unfair and anticompetitive.
State legislatures have become a battleground and similar legislation is being considered in states such as Georgia and Minnesota.
The Arizona bill was supported by the Coalition for App Fairness, which includes software companies such as Spotify, Match Group and Epic Games, which have come under Apple’s control of their App Store and want to that Apple lowers its rates by opening iPhones for alternative app stores. , and allow for alternative payment processes.
“The Coalition for App Fairness is pleased to see the approval of House of HB 2005, which will encourage business innovation in Arizona and protect consumer choice. While this is cause for celebration, it is only a first step toward achieving truly equitable playing conditions for everything, “said Meghan DiMuzio, executive director of the Coalition for App Fairness.
Last year, Epic Games filed antitrust lawsuits against Apple and Google that are currently working through the courts, focusing on many of the same issues, such as giving software makers the option to use their own processor. payments.
In October, the House Judiciary Subcommittee released a report saying Apple has a “monopoly power” over iPhone apps, which it uses to generate excessive profits.
In 2019, the Supreme Court ruled 5-4 against Apple in a case that opened the possibility of filing consumer lawsuits against Apple’s app store for allegedly inflating app prices.
Scrutiny appears to affect Apple’s App Store policies. Late last year, Apple introduced a new program that reduced its App Store sales rate from 30% to 15% for companies that earn less than $ 1 million a year in the App Store, answering some complaints.