Arizona bill could force smartphone App Stores to allow third-party payment systems

Posted:
in General Discussion edited February 22
A bill that could force Apple and Google to allow third-party payment platforms for in-app purchases on the App Store has been introduced in Arizona and is slated for a vote in the state's House of Representatives.

Credit: James Yarema/Unsplash
Credit: James Yarema/Unsplash


The piece of legislation is an amendment to Arizona House Bill 2005. Specifically, it "restricts the ability of certain digital application distribution platforms to require use of a specific in-application payment system."

In that way, it's similar to the bill introduced on February 10 in North Dakota, that ultimately failed. However, HB 2005 stops short at requiring tech companies from allowing outside app stores, and only applies to in-app payment systems.

The HB2005 amendment prohibits companies whose downloads from Arizona users exceed 1 million from requiring specific in-app payment systems as the sole way to accept payments. It also bars companies from retaliating against app makers who do use a third-party payment system. Like the North Dakota legislation, HB 2005 also features a specific carve-out for gaming consoles or music players, using very similar language to the North Dakota exception.

State Reps. Regina Cobb and Leo Biasiucci, the co-sponsors of the legislation, wrote in an op-ed that the bill would end the "monopoly" that Apple and Google have on their respective mobile ecosystems.

"The legislation would allow web developers to accept payments for their apps without going through Apple or Google's app stores, bypassing the app tax and reducing the cost for consumers without compromising security or safety," the representatives wrote.

Currently, third-party payment systems are prohibited under Apple's App Store Guidelines. Back in 2020, Epic Games implemented a system to bait Apple into removing "Fortnite" from the App Store, sparking an ongoing legal feud.

The legislation in North Dakota, which failed, was also given in draft form to lawmakers in the state by an Epic Games lobbyist. At the time, an Apple spokesperson said that the bill could "destroy iPhone as you know it" and would carry significant consequences for privacy, security, safety, and performance.

During an Arizona House Appropriations hearing Monday, Apple representatives touted the way the App Store democratized software by referring back to times when developers had to pay more to build and distribute apps.

Apple's 30% cut of in-app purchases has come under fire from app developers like Epic Games and groups like the Coalition for App Fairness, which rallies against what they claim are unfair app marketplace policies. In late 2020, Apple debuted a new program reducing that fee to 15% for developers making less than $1 million on the App Store.

The Arizona House Committee passed the bill as amended. It's now set to go before the entire Arizona House for a full vote.
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Comments

  • Reply 1 of 54
    What a nightmare for Apple.  I suppose they need to invest millions more dollars on state-level lobbying now.  Not great that Epic got ahead of them, convincing a couple of legislators to include Epic's language into a bill.  Surely Apple can out wine-and-dine any "undecided" representatives.  I don't know what they would do it this passes--except go to Congress to prohibit state-level regulation in this sphere.
    cornchipgeorgie01jony0watto_cobra
  • Reply 2 of 54
    "HB 2005 also features a specific carve-out for gaming consoles or music players, using very similar language to the North Dakota exception." How handy...and why the bill wouldn't be constitutional even if the idiots in Arizona passed it.
    pscooter63jony0watto_cobra
  • Reply 3 of 54
    Just another action taken to appear ‘woke’. Supported by old people who want to feel relevant—instead of sharing their actual wisdom with the youth they exchange it to feel like they aren’t old. 
    sconosciutoFileMakerFellerwatto_cobra
  • Reply 4 of 54
    Once more it's silly season in the various state legislatures. This bill will go nowhere but some virtue-signaling idiot Republican legislator will get to tell his/her constituents that he/she tried to do something about big bad Apple kicking treason-enabling Parler off its platform. I'm old enough to remember when conservatives vehemently insisted that private businesses should get to do business with whomever they please, e.g. bakers and gay weddings.

    NB the AZ Legislature is also contemplating measures to greatly restrict mail-in ballots and as well to allow the Lege to over-rule the will of the people if it doesn't like who they vote for in a presidential race. Maybe someday the voters of AZ will wake up to the utter contempt in which the state's Republican politicians hold them.
    edited February 22 viclauyycroundaboutnowDogpersonjony0watto_cobra
  • Reply 5 of 54
    lkrupplkrupp Posts: 9,454member
    So, if this passes, developers can cut Apple out completely from their revenue stream? Do these developers get to be in the App Store and pay absolutely no compensation to Apple for providing the platform on which to hawk their wares? If that’s the case then why would Apple continue to support the App Store since they get no income from it? What would happen if Apple were to simply shut down the App Store, allow sideloading, and let developers fend for themselves in terms of setting up their own stores, their own payment platforms, and their own advertising?

    Are App Stores on their way out and we return to the 1980s when developers were on  their own in selling their wares? It sure seems like it.
    edited February 22 viclauyycMisterKitplanetary paulmacplusplusjony0watto_cobra
  • Reply 6 of 54
    What a nightmare for Apple.  I suppose they need to invest millions more dollars on state-level lobbying now.  Not great that Epic got ahead of them, convincing a couple of legislators to include Epic's language into a bill.  Surely Apple can out wine-and-dine any "undecided" representatives.  I don't know what they would do it this passes--except go to Congress to prohibit state-level regulation in this sphere.
    It's not a nightmare. It's a nuisance. Ever had a complete asshole for a neighbor? Now imagine that same person with a lot of ambition and without a viable career path. That's your typical state legislator.
    edited February 22 jony0watto_cobra
  • Reply 7 of 54
    As a developer, you can use whatever payment processor you like and keep all profits yourself all whilst targeting every iOS device right now….no legislation needed. Progressive Web Apps (PWA’s) are supported both on iOS and Android. This gives developers the option of not using Apple’s App Store and saving themselves 30% if they have their own payment processing, marketing, discovery, worldwide tax reporting, local payment methods and multiple currency support etc, etc.

    https://www.simicart.com/blog/progressive-web-apps-examples/
    randominternetpersonaderutterDogpersonwatto_cobra
  • Reply 8 of 54
    cpsrocpsro Posts: 2,891member
    They should also accept cash!
    StrangeDayswatto_cobra
  • Reply 9 of 54
    MplsPMplsP Posts: 3,251member
    Seems like this would affect interstate commerce so wouldn’t any bill necessarily be a federal one and not a state one?
    randominternetpersonStrangeDayswatto_cobra
  • Reply 10 of 54
    flydogflydog Posts: 1,005member
    "HB 2005 also features a specific carve-out for gaming consoles or music players, using very similar language to the North Dakota exception." How handy...and why the bill wouldn't be constitutional even if the idiots in Arizona passed it.
    There's nothing unconstitutional about this proposed bill. 
  • Reply 11 of 54
    flydogflydog Posts: 1,005member
    As a developer, you can use whatever payment processor you like and keep all profits yourself all whilst targeting every iOS device right now….no legislation needed. Progressive Web Apps (PWA’s) are supported both on iOS and Android. This gives developers the option of not using Apple’s App Store and saving themselves 30% if they have their own payment processing, marketing, discovery, worldwide tax reporting, local payment methods and multiple currency support etc, etc.

    https://www.simicart.com/blog/progressive-web-apps-examples/

    Web apps and iOS apps are not the same thing.  Web apps cannot be offered on the App Store unless they are packaged within an iOS app binary using something like Electron.  Even if you did that, you would still be subject to App Store rules prohibiting other payment systems.

    Or maybe you're proposal is that developers bypass the app store and try to pitch "PWAs" directly to the public, wher people they would basically create an icon on their iOS home page like people did in 2007 before there were third-party apps.  This proposal is too stupid on its face to even discuss. 
  • Reply 12 of 54
    What a nightmare for Apple.  I suppose they need to invest millions more dollars on state-level lobbying now.  Not great that Epic got ahead of them, convincing a couple of legislators to include Epic's language into a bill.  Surely Apple can out wine-and-dine any "undecided" representatives.  I don't know what they would do it this passes--except go to Congress to prohibit state-level regulation in this sphere.
    Why not consider the possibility that Apple could simply not sell apps on any app store to people in Arizona? Why isn't this an option to you? 

    I am extremely eager for some jurisdiction to pass a bill like this in the hope that Apple will stop selling any software in that jurisdiction.
    aderutterpscooter63Dogpersonramanpfaffwatto_cobra
  • Reply 13 of 54
    Surely if Facebook can withdraw their “service” from Australian users to avoid their laws then Apple can simply prevent app-store in-app payments (irrespective of payment processor) from being an option in Arizona.

    Apple doesn’t need Arizona app-purchase income. I would hope Apple would do that same thing where I live if my legislators did something as equally backwards. 
    Dogpersonjony0watto_cobra
  • Reply 14 of 54
    aderutter said:
    Surely if Facebook can withdraw their “service” from Australian users to avoid their laws then Apple can simply prevent app-store in-app payments (irrespective of payment processor) from being an option in Arizona.

    Apple doesn’t need Arizona app-purchase income. I would hope Apple would do that same thing where I live if my legislators did something as equally backwards. 
    Facebook didn't withdraw their service. They simply stopped linking to news sites. You can't put "www.theaustralian.com.au" on Facebook in an Australian post. But you can write "go to The Australian web site for more info".  

    Apple has their own store because it costs them $ to vet apps and run the store. They do not charge for free apps, but they do take a cut of in-app purchases to pay for the store. What right does Arizona have to tell a company that they have to allow the free app, and then not take a cut of the in-app purchase? Would be like me setting up a table inside Wal-mart to sell T-shirts, and then not pay Wal-mart rent or a commission on each shirt sold.

    Now I would be ok with forcing Apple to allow a 3rd party app store, but that app store has to pay Apple some fee to be able to sell their wares.  Most people would still use Apple's app store, but some people would use another app store.  
  • Reply 15 of 54
    F**k Arizona. Whatever happened to interstate commerce? States are starting to act like little countries. Maybe each state should have its own currency and railroad gauge?
    danhpscooter63jony0watto_cobra
  • Reply 16 of 54
    F**k Arizona. Whatever happened to interstate commerce? States are starting to act like little countries. Maybe each state should have its own currency and railroad gauge?
    What happened to letting the market decide like states like Arizona champions?
    robin huber
  • Reply 17 of 54
    genovelle said:
    F**k Arizona. Whatever happened to interstate commerce? States are starting to act like little countries. Maybe each state should have its own currency and railroad gauge?
    What happened to letting the market decide like states like Arizona champions?
    This isn't free market, it's regulation.
    jony0watto_cobra
  • Reply 18 of 54
    Gee, I wonder who help them write it.
    jony0watto_cobra
  • Reply 19 of 54
    The goal in all of this is not to make things better for end users of Apple products, nor make things better for developers of software for Apple products.  The goal here is to make more money for the larger developers like Epic (and others) who are supporting and pushing this agenda.  Regardless of how these things go Apple will continue to make money.  The question is how expensive will software for Apple products get and how many small and independent software developers will get crushed and destroyed.  
    Dogpersonwatto_cobra
  • Reply 20 of 54
    nealc5 said:

    Apple has their own store because it costs them $ to vet apps and run the store. They do not charge for free apps, but they do take a cut of in-app purchases to pay for the store. What right does Arizona have to tell a company that they have to allow the free app, and then not take a cut of the in-app purchase? 

    This argument is invalid. Apple does not vet an App each time someone make a purchase, Apple vets an App initially and at subsequent updates.


    Have you ever heard that airlines pay percentages of each ticket to Boeing or Airbus? Have you ever heard of taxi companies sharing their profits with the car manufacturer? They pay for the car and for maintenance, but do not pay a percentage of each ride's fees to the car manufacturer.

     

    Apple does not share the loss of the App developers, so Apple should also not share their profits. Apple should just invoice the developer for the App store.

    Apple is not doing a favour to developers by providing the App Store: it help Apple to sell more devices. Isn't that superior App Store not the argument of many Apple fans for buying Apple devices? The superior aspect is not the user interface of the App Store, it is the collection of its Apps.


    muthuk_vanalingam
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