Last week, Epic Games reportedly help float a bill (no. 2333 for those who keep track) in the North Dakota Senate that could have banned app storefronts like the App Store and Google Play Store in the state under certain conditions. For example, a company like Apple could not force developers to use its in-app payment platform. In addition, Apple and Google would be banned from retaliating against developers who choose to offer their apps through a different means of distribution or use a different payment system.
Bill that could have banned the App Store in North Dakota fails to pass the State Senate by a vote of 11-26
This past weekend, The New York Times reported that North Dakota State Senator Kyle Davison (R-Fargo), who introduced the bill in the state senate last week, was “given the draft legislation by Lacee Bjork Anderson, a lobbyist with Odney Public Affairs in Bismarck. Ms. Anderson said in an interview that she had been hired by Epic Games, the maker of the popular game Fortnite.” Anderson also noted that “she was also being paid by the Coalition for App Fairness,” a nonprofit that includes Epic Games. The latter’s Fortnite game was punted out of the App Store after Epic offered Fortnite players the opportunity to pay for in-app purchases through Epic’s own platform. This is how legislation gets voted on in America.
This bill, which could have banned the App Store in North Dakota, failed to pass
Meghan DiMuzio, executive director of The Coalition for App Fairness released a statement: “The North Dakota bill is supported by the Coalition for App Fairness as a whole. Epic Games is a member of CAF, as are more than 50 additional companies. This is a broadly supported bill. Lacee Anderson works for Epic, Match, and CAF.”
Developers tend not to like Apple’s in-app payment platform because Apple takes as much as a 30% cut of revenue generated from in-app purchases. Google, too, takes a 30% cut of in-app purchases made in the Google Play Store. But there is one major thing that distinguishes the two app storefronts: iOS is a closed system and Apple does not allow the installation of apps purchased from a third-party app store. Google, on the other hand, does allow the sideloading of apps. This is why Apple faces a class-action suit from App Store uses who call Apple anti-competitive claiming that the tech giant can control the pricing of apps. Apple and Epic will also square off in Federal court in California starting on May 3rd.
In what is good news for Apple, the bill failed to move on in North Dakota after a less than competitive 11-26 vote count on Tuesday. It really wasn’t a surprise to those who got a glimpse of the North Dakota Senate Floor Calendar where it stated that committee recommendations called for the bill to die on the floor of the Senate.
But Apple is not totally in the clear. The Times adds that similar legislation is being considered in Georgia and Arizona while in Massachusetts a similar bill could be introduced. Wisconsin and Minnesota are discussing legislation centered around app stores.
Had the bill passed in North Dakota and was voted into legislation, Apple might have been forced to disable the App Store in the state. In fact, last week when the bill was being debated on the North Dakota state Senate floor, Apple’s chief privacy engineer, Erik Neuenschwander, testified that the bill “threatens to destroy iPhone as you know it.” Not that Apple needs to worry at this precise moment, but should a bill like the one voted down by the North Dakota Senate ever pass, Apple could decide to simply stop taking that 30% cut of in-app purchases to free itself of all this trouble. But Sensor Tower calculates that Apple and Google collected a combined $33 billion last year from their 30% cut of in-app purchases and a payday like that is hard to give up.