New Arizona legislation to allow in-app purchases outside the App Store
3rd March, 2021 at 4:48 pm by Yash and Liam
- New legislation introduced by state representative Regina Cobb would allow developers to enable in-app purchases outside the App Store.
- This would circumvent Apple’s revenue cut taken from all purchases in the App Store.
- Apple has been lobbying the government endlessly to try to prevent the bill from being passed.
After consideration of the legislation by the Arizona State, the Arizona Senate has been handed a bill which, if officially passed, will allow developers to accept in-app purchases for their respective apps outside the App Store — thereby preventing them from being forced to use Apple's in-app purchase options.
According to Protocol, Apple has been lobbying tirelessly against the bill for a month in Arizona. The company has been hiring auxiliary lobbyists and sending lawyers to Arizona in order to fight the case, alongside Rob Didiron (Apple's senior manager of state and local government affairs).
"We went through a very difficult weekend where Apple and Google hired probably almost every lobbyist in town," said Arizona State Representative Regina Cobb, the creator of HB2005.
HB2005, is an amendment to a 2005 Arizona bill, that is created to let app developers use third-party payment options to avoid the 15 to 30 percent cut that Apple takes from app purchases and in-app payments.
In a hearing last week, Apple's chief compliance officer Kyle Andeer called HB2005 a "government mandate that [may force] Apple to give away the App Store" and added that the bill "tells Apple it cannot use its own checkout lane and collect a commission in the store we built."
HB2005 could pass the House this week and potentially even make it through the Republican-majority Arizona Senate, making Arizona the first state to push through legislation to loosen Apple and Google’s grip over their app ecosystems in the country. There’s similar legislation being considered in Minnesota, Georgia, Hawaii and other states.
Lobbyist Ryan O'Daniel, a representative of the ‘Coalition for App Fairness,’ approached Representative Cobb with the proposal for a bill — which is what started the development of HB2005. The Coalition for App Fairness is a group of large developers, including Epic Games, Spotify, Tile, Basecamp, Blix, and others. The group was established last September and all the developers share in their disagreements with Apple — including in-app purchases and other issues. Rod Didiron has been assisting in the fight against this legislature and lending his experience from recent successes, including lobbying the state of California to prevent the passing of a right to repair bill in 2019. Additionally, Apple joined the Arizona Chamber of Commerce and hired former Arizona chief of staff (to Governor Doug Ducey) Kirk Adams and speaker of the Arizona House of Representatives, all in an effort to persuade Cobb and the state of Arizona not to pass the bill or even vote on it.
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 billions of dollars doing it. The bill is a government mandate that Apple give away the app store.
Apple lowered its App Store cut for developers making under $1 million to 15 percent in November, rather than the 30% formerly imposed on all developers. Andeer said that 83 percent of developers pay no fees at all, as they offer their apps for free.
It’s still uncertain if HB2005 will pass in Arizona, as it is facing opposition from Arizona Democrats who do not believe that the state legislature should interfere with ongoing litigation, referencing the legal battle between Apple and Epic Games. Furthermore, as cited by the report, Regina Cobb plans to have a discussion about the bill with Apple Executives at a meeting arranged by Adams.
Last month, Apple successfully fought back against a similar bill in North Dakota, which would have loosened the company’s control over its App Store. The bill, which was also backed by the Coalition for App Fairness, was shot down by the North Dakota Senate.
However, in this case, with its bill focusing totally on payments, Arizona's attempt might have a chance at passing a full House vote. If adopted, a large number of developers looking to avoid App Store taxes would likely congregate to the state.
Besides this, Apple is also under investigation for several accusations of monopolistic practices, as the company controls which apps are allowed on its devices and requires developers to pay a commission for each sale they make through the App Store. Moreover, the company is even under antitrust probe for its “Sign-in with Apple feature” and is being scrutinized by the U.S. DOJ, following various complaints filed by the developers.
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