The North Dakota state senate voted down a bill that would have enabled companies headquartered in the state to avoid paying app fees to Google and Apple.
The bill would have required companies making more than $10 million a year from app stores—basically, Apple and Google—to offer alternative payment processors for purchases through their respective app stores.
The senate voted 36-11 against the bill, which was lobbied for by Epic Games. The online video game company is currently battling Apple and Google in court over a policy that requires the firm to share 30% of its sales generated by its apps sold in Apple’s App Store and Google’s Play Store.
Also lobbying for the bill was the Coalition for App Fairness, a group of over 50 digital companies, including Spotify and Epic Games, which are pushing back on the app fees.
Republican state senator Kyle Davison introduced the bill, suggesting that it would be a nifty way to lure technology companies to North Dakota.
“North Dakota has a chance to be a leader. We have a chance to send it across the hall for further discussion,” Davison told CNBC. “It’s an economic development bill, because if this bill gets across the hallway, there isn’t enough hangar space to fly the private jets in from California.”
The bill didn’t die a partisan death—about 80% of North Dakota’s state legislature is Republican. Maybe that explains the fear-based perspective of lawmakers who drove the bill’’s rejection? Lobbying in opposition were Apple and Google, two companies with combined market capitalization of over $3.6 trillion, and which together made $33 billion in app commissions in 2020, according to Sensor Tower data.
The annual gross domestic product of North Dakota is only around $54 billion.
“We don’t want to put the state in a position where we need to spend our taxpayer dollars in litigation, because these are some very big companies,” Jerry Klein, a Republican state senator, said on the senate floor Tuesday. “Let’s stay out of the courts.”
Georgia, Arizona and Massachusetts are considering similar legislation, and lobbyists are pushing for nearly identical bills in Minnesota and Wisconsin.
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