Arizona moves forward with legislation that will force Apple and Google to allow alternative payment options

    
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While Apple and Google likely breathed a sigh of relief when a proposed North Dakota bill that would require the mobile platforms to allow alternative forms of payment was voted down by that state’s Senate, the Arizona state House of Representatives has recently voted in favor of its own form of that same legislation this past Wednesday.

The legislation is an amendment to Arizona’s existing HB2005 that prevents app stores that exceed 1 million downloads from forcing a developer based in the state to use a preferred payment system, and also bars companies from retaliating against app developers who choose to use alternative payment options. The amendment specifically exempts gaming consoles and “special-purpose devices connected to the internet.”

Arguments in favor of the bill say that smaller app devs are being forced to either absorb the costs or pass them on to their consumers, while opponents of the bill say that states should not interfere with the ongoing antitrust case between Epic, Apple, and Google while also raising concerns about interstate commerce and constitutionality.

The bill’s amendment now goes to the Arizona state Senate for a vote.

sources: CNBC, The Verge
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Schmidt.Capela

I guess the storefronts could get around this loss of revenue by charging for all the things the 30% surcharge covers.

Want to have your app listed? Pay for the technical and content evaluation needed to make sure the app conforms to the store’s content guidelines.
Want to be promoted on the storefront? Pay for the advertisement.
An user downloaded your app? Pay for the bandwidth.
Did you push an update? Pay again for the technical and content evaluation, as well as for the bandwidth users updating the app will use.
Want to keep you app available? Pay for recurring storage and listing fees.

And so on.

Ironically this would hit the hardest the smaller developers the bill is supposed to help.

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Arktouros

It’ll be interesting to see what happens with this one but seems more like a play from the state to woo app developers to come base themselves in Arizona. That in turn ends up being juicy tax revenue for them on a company and individual level as developers are often high paying jobs.

As always, however, the arguments in favor of the bill saying that the increased app payment processing costs are passed onto the consumer is pretty much a lie easily seen and disproven when you give people access to multiple platforms. Most $60 games on Steam remain $60 on EGS despite there being a lower revenue share split there.

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Leiloni

I’m not sure how this will play out and what loopholes will exist, but I like the idea in general of making it easier for smaller app developers to use alternative payment methods that aren’t as expensive. I know a lot of smaller, brick and mortar companies near me – whether they provide a product or a service – tend to prefer when people don’t use credit cards due to the extra costs involved and I even have some such as repairmen and HVAC maintenance companies that only accept checks and IIRC I think there are some pizza shops that only accept cash. If laws haven’t caught up yet to allow online businesses the same freedoms that brick and mortar stores have, I’d love to see that addressed.

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Jeremy Barnes

There’s never any wonderland on the other side. The calls for “Won’t someone think of the small developers?” are 90% from large corporations and the laws are written expressly for them to abuse.

It’s also a very, very bad idea to try to equate digital to the physical world. They are not the same.

However, back to the main point. When the same people who yesterday were saying everything digital needs to be locked down (magically somehow) to stop infringement are today yelling that some platform needs to be opened up… beware.

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Greaterdivinity

The amendment specifically exempts gaming consoles and “special-purpose devices connected to the internet.”

Man, I sure don’t see huge loopholes here. Looking through the bill…

A PROVIDER OF A DIGITAL APPLICATION DISTRIBUTION PLATFORM FOR WHICH CUMULATIVE DOWNLOADS OF SOFTWARE APPLICATIONS FROM THE DIGITAL APPLICATION DISTRIBUTION PLATFORM TO ARIZONA USERS EXCEED ONE MILLION DOWNLOADS IN THE PREVIOUS OR CURRENT CALENDAR YEAR MAY NOT DO ANY OF THE FOLLOWING

Seems like it’s hit most PC storefronts too, including EGS, Steam, Origin, uPlay, GOG etc.

REQUIRE A DEVELOPER THAT IS DOMICILED IN THIS STATE

So…could they not have local operations in AZ and the law doesn’t apply to them?

REQUIRE EXCLUSIVE USE OF A PARTICULAR IN-APPLICATION PAYMENT SYSTEM AS THE EXCLUSIVE MODE OF ACCEPTING PAYMENTS FROM ARIZONA

IIRC all the PC storefronts use “a particular in-application system as the exclusive mode”, so…friendly fire?

INCLUDING GAMING CONSOLES, MUSIC PLAYERS AND OTHER SPECIAL-PURPOSE DEVICES THAT ARE CONNECTED TO THE INTERNET.”

So consoles are safe. My read its more difficult on if something like Bandcamp would be safe, since it’s not a device but it is a music player.

But still seems like every PC digital storefront, at the very least the likes of Valve who sell games/movies/shows/music/other software look like they’d fall under this bill, assuming the “domiciled” line doesn’t functionally allow any company to just close any operations in AZ and skirt the whole thing.

EmberStar
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EmberStar

Not a lawyer. But I’m not sure if this hits Valve the same way as it does Apple. Granted, the only two examples I’m familiar with that are relevant are Warframe and Humble Bundle.

Warframe exists on Steam. It has a Steam launcher, and one branch of the cosmetics items are part of the Steam Workshop (and therefore have to be purchased exclusively through Steam Wallet transactions on PC.) *However,* you can buy the in-game cash shop currency and “Prime Access bundles” (and most other bundles, really) directly from the developers. So in this specific case, Valve is only requiring their own exclusive payment system for the cosmetics that are sold as a profit sharing system where Valve and Digital Extremes take most of the money, but random players can actually earn money from designing and selling in-game cosmetics.

For Humble Bundle, there’s the Humble Store. This is a digital storefont that sells PC games. Often in the form of a Steam key. So at least for games that are available to purchase on both Steam and Humble Bundle, Valve doesn’t require “exclusive use of their own payment system” either. You’re buying it from Humble Store. (Some money almost certainly goes TO Valve, but you can buy legitimate Steam keys from a “Not Steam” storefront.)

Granted, I AM NOT A LAWYER. I can barely read that kind of legalese, mostly because I interpret the words in “common usage” form and not with their formal legal meaning. I know just enough about legal writing to know there can be a significant difference. Misplace a comma on a legal document, lose half a million dollars. Choose the wrong adjective, get nuked from orbit by a legal Death Star. And it’s possible that this law *was* specifically written to screw many (or even most) online stores.

That’s kind of the problem with a legal system where many of the laws are written by people who still think Rock and Roll and comic books are a tool of the devil, and shout “Get off MY LAWN!” at anything invented after 1950. (Not really helped by the handful of “really way past retirement age” politicians who are *way TOO GOOD* at using Social Media, either.)