Apple aggressively lobbies against Arizona bill that would allow third-party App Store pay...
Apple and Google are ramping up lobbying efforts against an Arizona bill that would allow developers to use third-party in-app payments methods, bypassing the tech giants' 15% or 30% cut of digital sales.
Arizona State Rep. Regina Cobb, a co-sponsor of the HB2005 amendment, told Protocol that Apple and Google began intense lobbying activities before the bill was formally introduced in February.
"We went through a very difficult weekend where Apple and Google hired probably almost every lobbyist in town," Cobb said.
Apple's senior manager of state and local government affairs Rod Diridon, who successfully lobbied against a California right to repair bill in 2019, was reportedly called in to assist with the Arizona legislation. The iPhone maker also joined the Arizona Chamber of Commerce and hired Kirk Adams, former chief of staff to Arizona Gov. Doug Ducey and speaker of the Arizona House of Representatives, to discuss the amendment with Cobb, the report said.
Lawyers for both Apple and Google argued the constitutionality of the bill with the Arizona House's lawyers.
Cobb said she was presented with the idea for HB2005 in February by Ryan O'Daniel, a local lobbyist who represents Match Group and the Coalition for App Fairness. The bill would enable developers to tap third-party payment systems instead of those offered by Apple and Google in their respective App Store and Google Play Store marketplaces.
Apple's chief compliance officer, Kyle Andeer, at a hearing last week said that HB2005 amounts to a "government mandate that Apple give away the App Store," the report said. Andeer added that the bill "tells Apple it cannot use its own checkout lane and collect a commission in the store we built."
The Arizona legislation is similar to a more wide reaching bill that failed in North Dakota last month. That proposal dealt not only with third-party payment systems, but also demanded alternative app stores for smartphone users.
With its bill focusing solely on payments, Arizona's attempt to rein in powerful tech firms might have a chance at passing a full House vote. If adopted, large developers looking to avoid app store "taxes" would likely flock to the state.
Cobb plans to discuss the bill this week with Apple executives at a meeting arranged by Adams, the report said.
"It's time to make some concessions," Cobb said. "I'm sure other states are going to be watching from the sidelines. On both sides, I think they're going to start navigating a little bit more precisely after they've been able to gain knowledge from this experience in Arizona."
Arizona State Rep. Regina Cobb, a co-sponsor of the HB2005 amendment, told Protocol that Apple and Google began intense lobbying activities before the bill was formally introduced in February.
"We went through a very difficult weekend where Apple and Google hired probably almost every lobbyist in town," Cobb said.
Apple's senior manager of state and local government affairs Rod Diridon, who successfully lobbied against a California right to repair bill in 2019, was reportedly called in to assist with the Arizona legislation. The iPhone maker also joined the Arizona Chamber of Commerce and hired Kirk Adams, former chief of staff to Arizona Gov. Doug Ducey and speaker of the Arizona House of Representatives, to discuss the amendment with Cobb, the report said.
Lawyers for both Apple and Google argued the constitutionality of the bill with the Arizona House's lawyers.
Cobb said she was presented with the idea for HB2005 in February by Ryan O'Daniel, a local lobbyist who represents Match Group and the Coalition for App Fairness. The bill would enable developers to tap third-party payment systems instead of those offered by Apple and Google in their respective App Store and Google Play Store marketplaces.
Apple's chief compliance officer, Kyle Andeer, at a hearing last week said that HB2005 amounts to a "government mandate that Apple give away the App Store," the report said. Andeer added that the bill "tells Apple it cannot use its own checkout lane and collect a commission in the store we built."
The Arizona legislation is similar to a more wide reaching bill that failed in North Dakota last month. That proposal dealt not only with third-party payment systems, but also demanded alternative app stores for smartphone users.
With its bill focusing solely on payments, Arizona's attempt to rein in powerful tech firms might have a chance at passing a full House vote. If adopted, large developers looking to avoid app store "taxes" would likely flock to the state.
Cobb plans to discuss the bill this week with Apple executives at a meeting arranged by Adams, the report said.
"It's time to make some concessions," Cobb said. "I'm sure other states are going to be watching from the sidelines. On both sides, I think they're going to start navigating a little bit more precisely after they've been able to gain knowledge from this experience in Arizona."
Comments
Or stuff them with ads for Apple gear.
The irony is that ‘free market values’ made them so big to begin with, but with everything, there should be rules and measures in place to safeguard balance and competition.
BrainFreeze not CheeseFreeze....
But also, developers can still have a free app with in-app purchases in the Apple App Store, if the in-app purchase goes through iTunes, like it does now.
So developers can choose to pay Apple a certain amount up front and hope the saving from not having to pay the Apple a commission on in-app purchases more than make up for the upfront cost of having to pay a service charge for each download of the app.
Or choose to have a free app and pay Apple a commission, where the developers know they will not lose any money, no matter how little they make from in-app purchases.
Or have both and let their customers decide. Many might still want to pay with their iTunes account, even if with the other way, the in-app purchases might be cheaper. Either way, the iOS customers do not have to pay for the app, that has in-app purchases.
Since it is inevitable that some jurisdiction in the world will pass a law making at least one of Apple's App Store Guidelines illegal, we might as well find out sooner rather than later what Apple will do in such a jurisdiction. I am eager to learn what Apple's strategy will be if it loses. I see four possible responses:
(a) will Apple change its policies worldwide to comply with Arizona, (eg, prohibit free in-app purchases world-wide) or
(b) will Apple simply change its policies in that state only to comply with Arizona, (eg, find a way to implement this in Arizona only) or
(c) will Apple give up doing business in Arizona (at least in-app purchases [but maybe all sales of Apple products and Services if Apple wants to really fight back]) so that it doesn't have to abide by (or break) that policy? or
(d) will Apple provide a documented way for users to switch to a different OS so that Apple can argue (I'm not sure if Arizona would think this would be acceptable) that there is now a way for users to avoid paying in-app fees. After all, many of the same apps are available on both Apple's and Google's app stores. So that could be a legitimate argument for Apple to use.
Arizona is a very small jurisdiction, so it's an excellent testing ground for this to occur. I really don't know which of these three options Apple will pick, but I'm hoping for (c) or (d).
Remember that this law has nothing to do with iOS. The implementation for Arizona's requirement requires changes on Apple's servers. There's no way to implement this feature within iOS alone. This law is all about Apple's online services, not its operating system. It is very curious that Arizona's law requires something rather than restricts Apple from doing something. Arizona's law is a law that requires a certain action, not prohibit one. It's like saying "You must sell a green iPhone." There are many reasons why Apple might decide to refuse to sell a green iPhone. Because it's a requirement law rather than a restriction law, Apple's only response to fight this law might be to stop doing all business in Arizona, which is why option (d) may not suffice.
It is inevitable that somewhere the law will change to impact Apple's products or services. But Apple's reply should be "But I am Apple". To see this in video form, watch the following video:
The American justice system is daft though, basically lobbyists are there to bribe the politicians right? So one bribes for one thing whilst the other bribes for the opposite?
I have no doubt Apple will win though with its huge power and influence it has.
For me there are 2 solutions: