Arizona House Passes Bill Preventing Exclusive App Store Payment Systems

mobile app stock photo bannerThe Arizona House of Representatives has just passed a sweeping amendment to bill HB2005 that prevents app distribution platforms from forcing Arizona-based app developers to exclusively use a particular payment system, effectively putting a dent on Apple and Google’s profit from in-app purchases.

The bill applies to app stores exceeding one million downloads in the past year but exempts “special-purpose digital application distribution platforms,” including game consoles. As per the amendment, Arizona users will also not be required to use a specific payment system when paying for apps or in-app purchases.

According to The Verge, the Arizona House narrowly passed the legislation with a 31-29 vote. Most of those opposed to the bill were Democrats who argued that state legislatures shouldn’t be involved in ongoing legal disputes between companies, alluding to the antitrust lawsuit filed by Fortnite developer Epic Games against Apple and Google. Concerns were also raised on the bills possible effect on inter-state commerce and how it might be grounds for unconstitutionality claims.

The amendment has now passed to the state senate where they will vote on it before it’s sent to Arizona Governor Doug Ducey.

The HB2005 amendment is one of several proposed legislations that aims to put a stop to app store monopoly at the state level. Similar bills have also been proposed in New York, Maryland, Florida, Georgia, Minnesota, Hawaii, and North Dakota.

“Today, Arizona put a marker down and became the first state in the nation to advance a digital market that is free and fair,” the Coalition for App Fairness told The Verge. “The Coalition for App Fairness is pleased to see the House passage of HB 2005, which will encourage business innovation in Arizona and protect consumer choice. While this is cause for celebration, it is only a first step toward achieving a truly level playing field for all.”

“We look forward to working with the Arizona State Senate to move a solution forward that builds on this momentum to provide consumer freedom, lower costs, and increase developers' ability to thrive and innovate,” the group added.

The Coalition for App Fairness is a group of companies formed by Epic Games which includes Spotify and Match Group, the parent company of Tinder, OKCupid, and Match.