Apple is heavily lobbying against an Arizona bill that would allow developers to use third-party in-app payment methods, which would circumvent the Cupertino tech giant’s 15% or 30% commission.
Apple has been working against the bill since last month. The company has hired lobbyists and has been sending lawyers to Arizona. Apple’s lobbyist Rob Didiron began opposing the legislation before it had been officially introduced.
Apple lobbying against Arizona bill that would allow developers to use third-party payment options
As reported by Protocol, Arizona State Rep. Regina Cobb, who is a co-sponsor of the HB2005 amendment, said that Google and Apple began intense lobbying activities before the bill was formally introduced in February.
The Cupertino tech giant hired and sent Kirk Adams, the former chief of staff to Arizona Gov. Doug Ducey and speaker of the Arizona House of Representatives, along with the tech company’s own lobbyist Rod Diridon, to negotiate with Cobb on its behalf. Lawyers from both Google and Apple went to the Arizona House’s lawyers to argue that the bill is unconstitutional.
Cobb told Protocol that there was a weekend where both the tech giants “hired probably almost every lobbyist in town.” Both the companies are heavily opposed to developers using third-party payment systems on their respective App Stores. Apple’s chief compliance officer Kyle Andeer said in a hearing that the bill, “was basically 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 are selling digital goods, even if they’re making millions or billions of dollars doing it. The billl is a government mandate that Apple give away the App Store.
“This bill tells Apple it cannot use its own checkout lane and collect a commission in the store we built,” Andeer said. The app developers supporting the bill say it would prevent Apple and Google from taking a 30% cut from sales facilitated through their app stores, a fee that they have called “highway robbery.” Apple has responded that most software developers don’t pay a commission and those that do often pay around 15%, claiming the main beneficiaries of the Arizona legislation would be Epic Games, Spotify and Match.com, each multibillion-dollar companies.
The Coalition for App Fairness, and Basecamp co-founder, David Heinemeier Hansson said the bill was “easier” compared to a broader piece of legislation in North Dakota. Hansson was impressed by how quickly the bill was moving in Arizona Senate and said, “it would be mind-blowing if it was passed.” The bill is supported by a number of parties trying to reshape Apple’s online marketplace for iOS software.
The report notes that there are some politicians who are against supporting the bill because they think it could be seen as getting involved in Apple’s lawsuit against Epic Games, where the matter is currently being litigated.
Arizona’s effort to rein in dominant tech firms might have a chance at passing a full House vote. If successful, large developers looking to avoid the App Store commission would likely move to the state. Cobb plans to discuss the bill this week with Apple executives at a meeting arranged by Adams.
It’s time to make some concessions. 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 precsiely after they’ve been able to gain knowledge from this experience in Arizona.