Illustration: Sarah Grillo/Axios
Arizona has moved a step closer toward enacting a new law opening up the app stores Apple and Google run. It would allow app developers to use their own payment systems instead of giving Apple and Google hefty shares of every transaction.
What's happening: On Wednesday, the Arizona House passed a bill that would let developers in the state avoid the typical 30% fees that Apple and Google charge developers. The approval came despite a fury of tech industry lobbying against the deal, especially by Apple.
Catch up quick: Apple has been under regulatory scrutiny from its competitors, as well as businesses that need the App Store to sell their products and lawmakers around the world.
Why it matters: Other states will feel empowered to pass similar bills after seeing Arizona's success so far.
Yes, but: It was a tight vote (31-29). The bill now goes to the Arizona Senate and would also need to be signed by Republican Gov. Doug Ducey. Bill sponsor Regina Cobb, a Republican, told Axios she isn't sure where Ducey stands on it.
What they're saying: "I think we have a responsibility to our consumers," Cobb said. "You have to have a pretty good constitution to take on a company like Apple." Cobb said she hopes the bill would draw businesses to Arizona.
- Apple lobbyists managed to fight off a similar bill in North Dakota, Cobb said, which "scared people off," but "I want to show them how it can be done."
- Basecamp founder David Heinemeier Hansson, who has been vocal about what he sees as anticompetitive behavior by Apple, told Axios Basecamp is planning to move its headquarters from Illinois to Arizona if the law passes. "This trumps everything else," he said.
- If the bill passes, Arizona would become the most "desirable place on the planet overnight" for businesses who do commerce online, Hanson said, adding that Cobb "stuck her neck out and fought with a ferocious energy to make this happen."
The other side: "This bill tells Apple that it cannot use its own check-out lane (and collect a commission) in the store we built," Apple Chief Compliance Officer Kyle Andeer said in testimony before the Arizona State House.
- He continued: "This would allow billion-dollar developers to take all of the App Store’s value for free — even if they’re selling digital goods, even if they’re making millions or even billions of dollars doing it. The bill is a government mandate that Apple give away the App Store. "