Arizona Senate skips vote on controversial bill that would regulate Apple and Google app stores

The Arizona State Senate was scheduled to vote on Wednesday on an unprecedented controversial bill that would have imposed widespread changes in the way Apple and Google operate their respective mobile app stores, especially by allowing alternative in-app payment systems. However, the vote never passed on schedule without explanation. The Verge I saw all the other bills on the schedule being debated and voted on the Senate’s live stream, but Arizona HB2005, which topped the agenda, didn’t come out.

One notable Apple critic is accusing the current iPhone maker of intervening to halt voting, and said the company has hired a former chief of staff to Arizona Governor Doug Ducey to broker a deal that prevents the bill from being heard in the Senate. Above. This is after the legislative bill, an amendment to the existing HB2005 law, passed a groundbreaking vote 31-29 in the Arizona House earlier this month.

“The big show turned out to be a no-show. The bill was killed in the air while on the agenda with a backroom deal. Apple has hired the governor’s former chief of staff, and reported that it had brokered the deal to keep this unheard of,” said David Heinemeier Hansson, co-founder of Basecamp, a fierce Apple critic who gave testimony to support HB2005. Twitter this afternoon.

Apple declined to comment.

It is well-known that both Apple and Google hired lobbyists to fight the bill prior to today’s voting, according to a report by the company. protocol, This is because it directly threatened 30% of the enterprise’s industry standard app store fees. Had the Arizona bill passed the Senate and signed the law by Ducey, it would have made the state a haven for app creators trying to circumvent the App Store and Google Play Store’s payment system, the mechanism the company uses. Reduce all app sales and in-app purchases for digital goods.

It could also force both companies to introduce a patchwork system of state enforcement, or potentially force them to shut down their business in Arizona and open the door to lawsuits against the state, causing all sorts of additional headaches for both companies.

In testimony at the Arizona House earlier this month, Apple’s Chief Compliance Officer, Kyle Andeer, argued that the App Store offers developers enough value to justify the 30% cut. “This fee has been described as a’payment processing fee’ by some special stakeholders, as if Apple swipes a credit card. It is terribly misleading. Apple brings enormous value to developers. It’s both a store that allows you to distribute apps around the world and a studio that develops apps. That’s what the committee reflects,” Andeer said in written testimony.

“But this bill tells Apple that we can’t use our own checkout counters in our stores and collect fees,” he added. “This gives billions of dollars of developers access to all the value of the App Store for free, even if they sell digital goods and earn millions or billions of dollars. This bill is a government order for Apple to abandon the App Store.”

It’s also worth noting that the bill faced considerable opposition from the Arizona House of Representatives, not from Republicans who love big business, but from Democrats. Many Democrats have publicly opposed the bill, opposing Arizona for intervening in the California legal battle between game developer Epic Games and Apple and Google because it could potentially be unconstitutional for disrupting interstate commerce. Fortnite in Android and iOS platforms.

Sponsored primarily by Congressman Regina Cobb (R-5), the bill is one of many that has emerged in the national state legislature challenging Apple’s and Google’s long-standing policies on the mobile app economy. The bill can be traced back to growing antitrust pressure in Europe and Washington, DC for the rise of Big Tech, a new region in the ongoing fight against the oversized power of the tech industry and all the ways lawmakers can try and try. And the main wire. Other sectors include California and the European Union, where Epic launched its own battles. Launched antitrust investigations on the App Store and Apple Pay on anti-competitive claims.

Both Apple and Google have two of the most dominant app stores in the world, and the Google Play Store allows alternative app stores, so they allow alternative payment systems, but Apple doesn’t. This means that all digital purchases on iOS are subject to Apple’s mandatory 30% cut, or in some cases, 15% reduction. However, Apple has been criticized for cutting secret deals such as those it has signed with Amazon through a Prime Video subscription. -Exempt certain types of purchases when in-app purchases, strategically convenient.

Over the past six months, both companies have announced a fee structure change that allows small developers, who make up the majority of Android and iOS app makers, to claim a 15% cut, but the app store has little reassurance. critic.

Most of these antitrust offers, such as HB2005, are the work of the Coalition for App Fairness (CAF). CAF is an industry group formed last year of Epic, Spotify, Tinder parent company Match Group, and dozens of other companies increasingly dissatisfied with the status quo of the mobile app economy and the ironclad developer contracts of app store owners. Some companies, such as Spotify, have complained about Apple’s unfair treatment over the years, accusing the company of using App Store rules and iOS requirements to prioritize its own software over its competitors.

CAF started lobbying lawmakers earlier this year in North Dakota to instigate the introduction of legislation such as HB2005 in several states, now including Arizona. While the North Dakota bill failed, Arizona was seen as a more promising alternative because it focused solely on in-app payment systems, and the North Dakota bill mandated operating system owners to allow alternative app stores as well.

“The legislative meeting is not over. We will continue to push solutions that will expand our options, support app developers and small businesses, and stop monopoly practices,” said Meghan DiMuzio, Managing Director of CAF. The Verge.

Now the fate of the bill is questionable and it is not immediately clear what happened. Senator Cobb, the bill’s sponsor, did not respond to requests for comment. The Arizona Governor’s office and Arizona State Senate Majority Leader Rick Gray (R-21) office also did not immediately respond to requests for comment.

Update March 24th at 10:12pm EST: Added statement of Coalition for App Fairness.


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