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Apple and Google App Store Fees Take Hit in the Arizona House

Google Play Store
(Image credit: Google)

Signaling a major challenge to a multibillion business established by Apple and Google, the Arizona House of Representatives voted Wednesday to advance an amendment that would allow app providers based in the state to avoid fees charged by the tech giants’ respective app stores. 

The 31-29 vote to advance a major amendment to Arizona’s existing HB2005 comes two weeks to the day after the North Dakota State Senate voted down similar legislation

The amendment prohibits app stores exceeding 1 million downloads—basically, Google Play and Apple’s App Store—from requiring “a developer that is domiciled in this state to use a particular in-application payments system as the exclusive mode of accretive payments from a user.” Videogame consoles are exempt. 

Epic Games, maker of the popular online game Fortnite, 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. 

The Fortnite app was banished from Google Play and the App Store last after it directed Fortnite players to use an alternative payment system to purchase in-app trinkets. If Epic were based in Arizona, and the amendment were to pass the Arizona State Senate and get signed off on by the Governor Doug Ducey, Apple and Google would have to restore the Fortnite app.

Collectively, Google and Apple made $33 billion in app commissions in 2020, according to Sensor Tower data. 

“Today, Arizona put a marker down and became the first state in the nation to advance a digital market that is free and fair,” said the Coalition for App Fairness, the industry group that drafted the bill, and includes Epic games, Match Group and Spotify. 

“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.”

This legislation has implications far beyond video games and includes areas like video streaming. For instance, Google told Netflix in September that it was going to close loopholes that allowed the top SVOD service to avoid its in-app fees. 

Georgia and Massachusetts are considering similar legislation, and lobbyists are pushing for nearly identical bills in Minnesota and Wisconsin. 

Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!