Arizona’s Controversial App Store Bill to Take on Apple and Google Is Officially Dead

Arizona is now the second U.S. state to officially give up on its attempt to regulate Apple’s App Store, after lawmakers conceded that there simply wasn’t broad enough support for — or understanding of — this kind of regulation to actually bring it to pass.

Last month, it became apparent that there had been a groundswell of lobbying within state governments by the Coalition for App Fairness (CAF), an independent group of developers that is, for all intents and purposes, spearheaded by Epic Games.

While the Coalition is technically an independent entity, the fact that it was founded by Epic Games, in the days following its open declaration of war on Apple, makes it pretty clear that the Fortnite developer has a great deal of influence within the group, at best. At worst, the entire CAF is just a front for Epic’s own vendetta against Apple’s “monopolistic” App Store practices.

Although the Coalition boasts numerous members, ranging from big players like Spotify to small indie developers, the agenda of the Coalition and Epic Games are almost in perfect lockstep, especially when it comes to lobbying for the kind of changes that are being pushed toward state lawmakers.

For instance, the North Dakota bill that kicked off this latest round of controversy would have forced Apple (and Google) to allow developers to use any alternative app marketplace or payment processing methods of their choice to distribute their apps onto iOS and Android devices. This was exactly what Epic was asking from Apple last June — a “competing Epic Games Store app” that would have “equal access to underlying operating system features,” as Apple’s own App Store.

Naturally, Apple told Epic in no uncertain terms that this wouldn’t be happening, which ultimately led to Epic’s public war on the App Store and the formation of the CAF.

The North Dakota bill ultimately failed, no doubt due at least in part to lobbying by Apple and Google. However, in the aftermath of the bill being voted down, it also became evident that most of the state senators involved really had no understanding, and ultimately weren’t too motivated to pass a bill that they didn’t grasp in the first place.

Arizona’s Failed Kick at the Can

So, it’s probably no surprise that a similar law proposed in Arizona failed to gain traction as well, although it did make it a bit further.

Initially, the Arizona bill didn’t seem like it was going to get very far, but it ended up surprising many by squeaking by in the Arizona House Representatives in a 31-29 vote.

Even more surprising was the fact that most Republicans supported the bill, while Democrats opposed it based on a combination of constitutional concerns on mucking about in interstate commerce as well as a desire to avoid the ongoing war between Apple and Epic Games — a case which is seen by many as an issue for California to deal with.

Of course, it’s also possible that some of this may have just been good old-fashioned partisanship, since the bill itself was introduced by a Republican, Rep. Regina Cobb.

Still, with approval from the state senate being the only remaining major hurdle for the bill, it looked like there was a good chance it might succeed. In fact, it was on the agenda last week to be debated and voted upon, but when the time came for it to make its appearance, nothing happened.

Instead, the senate just moved onto the next item, with nary a mention of the bill, HB2005, and no word or official comment as to why it simply went away.

This naturally led some of Apple’s most vocal opponents to immediately start tossing around hyperbolic allegations of corruption, suggesting that Apple had bought off some legislators in the state to kill the bill and prevent it from even being introduced in the senate.

To be fair, The Verge has reported hearing a similar allegation “from multiple sources with knowledge of the situation,” it also adds that nobody has been willing to go on the record except for Hansson.

What these louder anti-App Store zealots failed to admit, however, is that the bill itself only existed because of lobbying by Epic Games and the Coalition for App Fairness. Not only did the CAF convince legislators that the bill would be a boon for small businesses, but they went so far as to basically write the legislation for them. Essentially, lawmakers were being handed a draft bill by the Coalition and told to introduce it because it would be “good for business.”

It’s a move that analyst Neil Cybart called out as “very ugly behaviour and tactics,” adding that “many lawmakers had no clue what they were even voting on.”

So, it’s fair to say that it wouldn’t take much lobbying on the part of Apple to convince lawmakers to give up on what it could easily paint as an ill-conceived idea. Apple likely didn’t even have to convince too many of its side of the argument — merely sow enough seeds of doubt to make representatives and senators think twice about whether they really wanted to back this sort of legislation.

Apple and Google reportedly hired almost every lobbyist in town to make their case against the Arizona bill, and obviously that money was put to good use.

In the end, despite allegations of corruption and backroom deals, this appears to be exactly what happened. According to The Verge, the Arizona bill was withdrawn simply because it didn’t have enough support in the state senate.

Republican State Commerce Committee Chair J.D. Mesnard told The American Prospect that he was the one who ultimately pulled the bill from the agenda, deciding it was better to avoid voting on it at all rather than see it ultimately fail.

I polled the committee members and there just wasn’t enough support for it. A number of members were conflicted on it, others were just opposed. There was some support for it, but it definitely was coming up short.

J.D. Mesnard, Arizona Senate Commerce Committee Chair

Rep. Regina Cobb, who was the original sponsor of the bill, also went on the record with The Verge, stating that she didn’t feel that there was anything illegal or nefarious. Rather, the lack of support for the bill was just the result of “lobbying as usual.”

I realized once you start taking on Apple and Google this way you’re going to be hit pretty hard.

Arizona Rep. Regina Cobb

Cobb freely admits that her decision to back the bill was a direct result of lobbying by the Coalition, but acknowledged that having two big tech giants — not only Apple, but also Google — on the other side was going to be an uphill struggle. Cobb adds that she had multiple meetings with Apple, including one with Tim Powderly, the company’s Director of Federal Government Affairs. She insists that the conversations were all very polite and professional, but also noted that Apple was “very intent on finding a compromise.”

At this point, however, the bill is ultimately dead, at least for this legislative session. Cobb notes that there’s an extremely remote possibility it could come back as a “striker” — a controversial legislative maneuver that could force the Senate to reopen debate on it — that’s extremely unlikely because of the negative publicity that strikers tend to generate at the best of times.

That said, the bill could still be introduced next year, although Cobb told The Verge that she’s not likely going to push forward on it unless she thinks she’ll have a good chance of success. Like many lawmakers, she has better things to do with her time and political capital.

The Fight’s Not Over

The CAF, however, plans to continue the battle on multiple fronts, likely encouraged by the fact that the Arizona bill made it a lot farther than the earlier North Dakota one did. There are already similar lobbying efforts toward bills in other states such as Massachusetts, Rhode Island, Wisconsin, and Minnesota, and it looks like the Coalition hasn’t declared defeat yet even in Arizona.

The legislative session is not over. We will continue to push for solutions that will increase choice, support app developers and small businesses and put a stop to monopolistic practices.

Meghan DiMuzio, Executive Director, The Coalition for App Fairness

Pat Garofalo, director of state and local policy at the American Economic Liberties Project believes that it’s ultimately only a matter of time before the CAF manages to convince at least one state to get on board.

This idea is out there, now this is sort of in the zeitgeist. I do think a state will do this, and there are really good reasons for a state to do it.”

Pat Garofalo, Director, American Economic Liberties Project

Ultimately, he says, the CAF needs to find a group of legislators that will actually “hear the right arguments” and see tangible, positive benefits. Of course, they’ll also need to have the courage to go up against big tech, and not be persuaded by the arguments of the lobbyists from the other side.

So far, there’s been a definite sense that state legislators are simply pawns stuck in the middle of the much larger war raging between Apple (and Google) on one side, and Epic Games on the other. If the Coalition wants these attempts to succeed, it’s going to need to make a much more convincing case that will actually win the hearts and minds of lawmakers.