A Passed Arizona House Bill Threatens Apple and Google in This Way

Apple an Google may have to watch out for their app stores as a new Arizona house bill that has been passed stands to threaten both.

It was on Wednesday that the Arizona House of Representatives had voted 31-29 to pass a bill that will require app stores to allow app makers to use their own payment processing software.

This would avoid fees that are charged by Apple and Google and would represent a setback for both companies.

The legislation, dubbed HB 2005, has not become a state law yet however.

Arizona Gov. Doug Ducey would have a choice to veto the bill once it hits his desk. If it becomes law, Arizona will have to grapple with questions including how Apple or Google will comply, or if it would be challenged in court.

While Apple has opposed the law, the Coalition for App Fairness has been backing the bill. The group includes software companies like Spotify, Match Group, and Epic Games.
Recently the North Dakota state senate voted against passing a similar bill.

HB 2005 has targeted Apple’s fees by requiring companies that run app stores with over a million downloads per year to allow apps to offer alternative payment processors, enabling developers to avoid fees ranging from 15% to 30%. The bill would apply to companies and users in the state of Arizona.

The bill has exempted digital software stores for game consoles or music players.
“I think they have a monopoly on the market right now,” said bill sponsor Republican Arizona State Rep. Regina Cobb. “There isn’t anybody in here that doesn’t have a Google Android or Apple phone, I guarantee it.”

“Arizona does not have an interest in this fight,” Democratic Arizona State Rep. Diego Rodriguez said. “We don’t have a dog in this fight, what we need to do is be focused on policies that are protecting consumers. This bill does not protect consumers, it protects a $1 billion company from another billion-dollar company.”

Kyle Andeer, Apple’s Chief Compliance Officer, said at a hearing last week that it amounts to a “government mandate that Apple give away the App Store.”

“This would allow billion-dollar developers to take all of the App Store’s value for free—even if they’re selling digital goods, even if they’re making millions or even billions of dollars doing it,” Andeer said.

“The Coalition for App Fairness is pleased to see the House passage 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 a truly level playing field for all,” said Meghan DiMuzio, executive director for the Coalition for App Fairness.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.