North Dakota Just Shot Down Its Anti-App Store Bill (But the Fight Is Far from Over)

North Dakota State Capitol Credit: Ace Diamond / Shutterstock
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Although numerous antitrust investigations have been brewing over Apple’s allegedly “monopolistic” App Store policies, it wasn’t until last week that we heard that at least one group of lawmakers had actually begun to consider legislation that could have barred Apple from forcing developers to sell their iPhone and iPad apps exclusively on its App Store.

The move came from a rather surprising corner, however, in the form of a bill put forward by a North Dakota State Senator, in an attempt to “level the playing field for app developers” in that state.

However, it wasn’t clear from the beginning exactly how authorities in North Dakota proposed to actually enforce this action against Apple, since it would only be binding within the borders of that one state, and Apple could easily just stop doing business there if the rules became too prohibitive — with no Apple Stores in North Dakota and a population of around 760,000, it’s unlikely that such a move would represent any real economic loss for the $2 trillion company.

Either way, the good news is that it looks like this proposed legislation has already died on the table. Last week, State Senate Committee Chairman Jerry Klein (R-Fessenden) had suggested that there was “still some mulling to be done” before even moving the bill forward, but now it seems that the state senate has already voted it down in an 11-36 vote this week.

Unfortunately, however, this may just be the first battle in the larger war, with Jack Nicas reporting in The New York Times that several other states, including Arizona, Georgia, and Massachusetts have all begun considering similar legislation.

The Forces Behind This

It’s probably not a big surprise that politicians aren’t coming up with these ideas on their own, and as Nicas points out, the move is in fact headed behind the scenes by none other than Epic Games, which of course is embroiled in its own massive war with Apple.

In fact, as Nicas reveals, the legislation that was put forward in North Dakota by State Senator Kyle Davison (R-Fargo) was actually drafted by a lobbyist for Epic Games.

Mr. Davison said he had been given the draft legislation by Lacee Bjork Anderson, a lobbyist with Odney Public Affairs in Bismarck. Ms. Anderson said in an interview that she had been hired by Epic Games, the maker of the popular game Fortnite and the plaintiff in lawsuits against Apple and Google over their app policies.

Jack Nicas, reporting for The New York Times

The lobbyist in question, Lacee Bjork Anderson, also represents the Coalition for App Fairness, which is a larger lobby group that includes Epic, Spotify, and several other companies who are pushing for changes to the App Store in a number of different ways.

The Coalition and Epic released a joint statement (via 9to5Mac) that noted that while Epic supported the bill with testimony, it was the Coalition that “took the lead” on the bill. However, since the group was effectively founded by Epic Games, which remains one of its strongest voices, the distinction is a pretty subtle one, other than to perhaps emphasize that the legislation had support from a broader base of developers.

According to Nicas’ report, Anderson got the attention of Kyle Davison, the North Dakota State Senator who sponsored the bill, by arguing that small businesses in North Dakota were being harmed by the tech giants, and the suggestion that passing her bill would help to attract more tech companies to the state. Before that, Davison’s focus had been on literacy programs and birth records for the homeless.

She said to me that this could be big. But to me, that means the local newspaper is going to come with a camera. I would not be truthful if I said I expected the reaction.

Kyle Davison, North Dakota State Senator (R-Fargo)

In an interview with the Times, Davison expressed some surprise at the reaction that the bill garnered, drawing Washington lawyers and Silicon Valley executives to the State Capital in Bismarck.

In the end, however, it seems that Apple and its lobbyists won out over those groups who were pushing for the bill, with State Senator Jerry Klein, the Republican who headed up the committee that was dealing with the legislation, noting that he opposed it because of fears that the bill could “put North Dakotans at risk of cyberattacks” along with bringing expensive lawsuits to the state. He also expressed concerns about any legislation that would see the government interfering in agreements between private companies.

State lawmakers also clearly didn’t understand many of the more technical details that were clearly being foisted upon them by lobbyists. The committee chair, Senator Klein, is a 69-year-old retired grocery-store owner from the tiny town of Fessenden, and openly said that he and his colleagues weren’t keen on passing a bill that they didn’t fully grasp in the first place.

All people here know is that they’ve got their phone plugged in, it has power, they can take pictures and show photos of their grandkids. This goes beyond some of us.

Jerry Klein, North Dakota State Senator (R-Fessenden)

Developers Prepared to Flock to North Dakota

It looks like one of the ways that lobbyists tried to entice lawmakers in North Dakota, however, was with the promise that many app developers would potentially relocate their operations to North Dakota if it suddenly became an “App Store free zone.”

Notably, David Heinemeier Hansson, who was involved in a heated battle with Apple last spring over the “Hey” email app and has been vocal in his opposition to Apple’s App Store policies for years, told the Times that he was preparing to set up offices in North Dakota if the bill passed, and expected that many other companies would follow his lead if it meant avoiding giving up 30 percent of their sales to Apple.

While Apple could still conceivably just refuse to do business with companies based in North Dakota if this legislation were to pass, that could present a challenging decision from a purely political point of view, but more importantly, lobbyists and proponents of the legislation believe that it’s only a matter of one state taking the first step before the rest can be persuaded to follow suit.

Apple’s “win” for the App Store in North Dakota is therefore one way of shoring up against that possibility, but it looks like this will only be its first battleground, as a representative in Massachusetts has already told the Times that he will be introducing a similar bill in his state this week, while lawmakers in Georgia and Arizona are said to be considering similar legislation that’s been handed to them by lobbyists, who are also pushing for the same in Wisconsin and Minnesota.

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