Arizona bill targeting Google and Apple’s App Store profits fail again

Jerod MacDonald-Evoy

Arizona Mirror

A bill to cut the profits Apple and Google make from their app stores was defeated by lawmakers on Wednesday, the second year in a row that Big Tech companies have blocked such legislation from moving forward.

This year House Bill 2662
would have banned any provider of the app platform used by more than a million Arizonans from making their app store the exclusive place to get apps – and forcing users to use their system of payment.

“I’m skeptical of government interference in the free market, but Big Tech has eliminated that competition in the free market,” Republican Rep. Kingman Regina Cobb, the bill’s sponsor, told the House Judiciary Committee. “This bill is already seen from last year, and I know many of you are under pressure.”

Apple and Google have waged a public war with major developers who have rebelled against App Store policies. Apple has booted the hugely popular video game Fortnite from its app store
after the developer, Epic Games, bypassed Apple to allow players to purchase in-game virtual currency directly from the company. Google quickly followed suit.

Epic quickly filed several lawsuits against the two companies. In the case against Apple, the court sided with Apple on nine of 10 counts in a mixed decision last year, stating that Apple was not a monopoly but the company could not block in-app purchases.

An Apple software executive who spoke to the committee on Wednesday said HB2662 is essentially asking lawmakers to take sides in the ongoing legal battle between the company and Epic Games. In appealing the case, the US Department of Justice, Microsoft and attorneys general from 35 states have filed legal documents challenge the original decision.

And the bill could put users, especially children, at risk because Apple’s App Store includes parental controls on content and in-app purchases, said Erik Neuenschwander, Apple’s chief software officer.

“If this bill were to pass, app developers would choose different developers and parents wouldn’t know if they have the same level of protection,” he said, adding that a handful of “companies rich” helped fund Cobb’s legislation.

Fear of injecting Arizona state law into an ongoing legal battle prompted lawmakers to oppose the bill.

“I don’t think we should be in the middle of this,” Rep. Domingo DeGrazia, D-Tucson, said. “There are a lot of considerations here that are beyond us, and we haven’t touched on cybersecurity and privacy either.”

Rep. Beverly Pingerelli, R-Peoria, echoed that and said the bill goes too far.

“I don’t think we should be in the middle of a contract dispute,” she said.

The legislation was killed by a 4-5 vote in the House Judiciary Committee.

Already seen

In the last session, Cobb introduced the same legislation and found himself the target of a army of lobbyists who descended on the Arizona Capitol to kill Bill.

Apple and Google lobbyists also killed a similar bill in Georgia. Apple lobbyists have threatened to pull out of two major economic development projects, one of which is an investment of $25 million in a black college in Atlanta and a multi-billion dollar partnership with Kia build self-driving vehicles in the city of West Point, according to Policy.

A year ago, as Cobb rallied support for the measure, lobbyists were sending letters to GOP lawmakers in the American Legislative Exchange Council, an organization that connects big business with Republican lawmakers to craft laws, and anti-government activist Grover Norquist. The posts warned that Cobb’s legislation was government overreach that would hurt consumers.

A lobbyist, Stuart Goodman, also sent a letter from the Electronic Transaction Association opposing similar legislation in North Dakota. Before the bill in North Dakota was defeated, Apple representatives held a closed meeting with the majority of the Senate committee hearing the bill without releasing an agenda, raising questions about the Open Public Meetings Act in this state.

Apple lobbyists in 2021 emailed Senate Commerce Committee Chairman JD Mesnard, R-Chandler, and called the previous version of the legislation “liable to legal challenges.” Over the next two weeks, outside groups would send letters to senators opposing the bill, according to records obtained by Tech Transparency Project.

The Senate Commerce Committee ended up tabling the bill on March 24, and it was never heard from.

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