North Dakota lawmakers float bill targeting 'monopolistic' app stores

Cal Jeffrey

Posts: 2,918   +763
Staff member
In brief: As Epic Games continues to butt heads with Apple in the legal arena over its "draconian" App Store policies, the battle is heating up on another front. In what seems to be a move sympathetic to Epic's plight, the North Dakota Senate introduced legislation that would award Epic a win at the ND state level.

The North Dakota legislature has introduced a bill that could tear down Apple's walled garden. Senate Bill 2333 proposes to outlaw online marketplaces from locking developers into their ecosystems and using their payment platforms. Nearly everything that Epic is currently battling Apple over in the courts is in this proposal.

"The purpose of the bill is to level the playing field for app developers in North Dakota and protect customers from devastating, monopolistic fees imposed by big tech companies," State Senator Kyle Davison told The Bismarck Tribune.

Davidson believes that forced market participation with its 30-percent fee imposed on developers hurts consumers by raising prices and reducing choices. App makers in North Dakota support the bill for obvious reasons.

"They control so much about what consumers can get, what businesses can do, and it really puts these businesses in a tough position," said Joe Sandin, CEO of Fargo-based developer Onsharp.

The legislation would introduce three restrictions on online app marketplaces such as Apple's App Store or Google Play.

A proprietor of a digital application distribution platform for which cumulative gross receipts from sales on the digital application distribution platform to residents of this state exceed ten million dollars in the previous or current calendar year may not:

  • Require a developer to use a digital application distribution platform or digital transaction platform as the exclusive mode of distributing a digital product.
  • Require a developer to use an in-application payment system as the exclusive mode of accepting payment from a user to download a software application or purchase a digital or physical product through a software application.
  • Retaliate against a developer for choosing to use an alternative application store or in-application payment system.

In other words, app makers would be free to hawk virtual goods in their in-app stores or distribute them outside the App Store or Google Play, without fear of being banned from the iPhone or Android platforms. Of course, Apple is dead set against it and spoke out in melodramatic fashion when addressing North Dakota's Senate Industry, Business and Labor Committee.

"[This bill] threatens to destroy iPhone as you know it," Apple Chief Privacy Engineer Erik Neuenschwander told the committee. "[It will] undermine the privacy, security, safety, and performance that's built into iPhone by design. Simply put, we work hard to keep bad apps out of the App Store; [this bill] could require us to let them in."

SB 2333 is still in the very early stages of debate and consideration, with no timeline yet set for a vote. Committee Chair Jerry Klein said, "There's still some mulling to be done."

Image credit: ymgerman

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brucek

Posts: 769   +1,063
TechSpot Elite
Even if I agree with the sentiment, I'm not wild about every little local jurisdiction getting to come up with its own rules over what should be national policies.

If it were to pass, and not fail to other legal challenges, I wouldn't be shocked if Apple officially abandoned the North Dakota market, and then regained much of it back when the Apple fans there re-registered their phones in another state.
 

bviktor

Posts: 379   +678
I don't see this ever passing. The moment someone points out to them that if users are allowed to use any app store they please, legislative app bans, and any and all counter-pirate measues will be rendered completely useless, these "clever" fellas will backtrack in a moment.

I, for one, like my iPhone BECAUSE it is locked down, not despite of it lol.
 

brucek

Posts: 769   +1,063
TechSpot Elite
Telling Apple they are not allowed to ban an app because it accepts cash payments through another cash processor is not the same as telling Apple they can not ban an app over virus, malware, or other concerns.

But I agree with the larger point, there's just too many issues with one state trying to do this differently from 49 others.
 

psycros

Posts: 3,406   +3,904
If Apple wasn't so damn greedy they would not only be #1 in mobile but probably top dog in all consumer technology.
 

m4a4

Posts: 2,288   +2,497
TechSpot Elite
Unfortunately, without the draconian policies, Apple Store would quickly turn into a giant virus + malware hive, just like Google Store.
No it wouldn't. The amount of revenue generated by the app store covers the cost of running it hundreds (if not thousands) of times over. They can certainly afford to lose the draconian measures, and then they can afford to be competitive against competing payment processors.

The only thing they would lose is the ridiculous amount of revenue they get for being a middle man most of the time.
 

duckofdeath

Posts: 293   +393
Unfortunately, without the draconian policies, Apple Store would quickly turn into a giant virus + malware hive, just like Google Store.
They are saying "payment systems", which is a clever way to nix that faux argument.
Android already have sideloading and the world haven't succumbed to a malware flood.
 

NeoMorpheus

Posts: 422   +809
As an apple victim that doesnt drink the cult’s koolaid, I hope this passes.

I want to instal SteamLink, RetroArch and many, many more apps on my iPad Pro, but since there is no option, I am screwed.

The worse part is how the rabid cult members are so brainwashed by Apple, that they actually defend their actions, even though you the customer are affected by this.

If apple is not forced open, I will simply sell this and get a galaxy tab.
 

gamerk2

Posts: 510   +410
Even if I agree with the sentiment, I'm not wild about every little local jurisdiction getting to come up with its own rules over what should be national policies.

The Supreme Court ruled on this issue about a decade ago. It was about rules California put in place in regards to treatment of animals in meet factories, which would prevent out of state sellers from selling in the California market unless they met Californian standards. For obvious reasons, several states sued.

The court ruled basically "California can set whatever standards it wants; if you don't like it, don't sell in California." Same logic likely applies to this case, although there are a bit more interstate commerce clause effects to consider which could complicate things.
 

terzaerian

Posts: 800   +1,131
Even if I agree with the sentiment, I'm not wild about every little local jurisdiction getting to come up with its own rules over what should be national policies.
The federal government, at this point, is just American Idol for people too ugly to be actors and too stupid to day trade. So you'll excuse me if I'll take what consumer protection I can get from whichever state governments are still bothering to govern.
 

McKocoa

Posts: 29   +41
I think passing the legislation would be a good step, not to say it's the fix, but we have to get the ball rolling this way, away from monopolistic control and more choice for consumers. It's not to say you have to use third party services, but give us the choice, give developers a choice.
 

BadThad

Posts: 449   +420
If Apple wasn't so damn greedy they would not only be #1 in mobile but probably top dog in all consumer technology.

Greedy? If you started a company wouldn't your goal be to produce as much revenue as you can? Would you prefer to live under communist rule where the government controls ALL aspects of commerce?

I will NEVER understand those that call companies greedy. The goal of EVERY company in the world is to make money, as much of it as they can. It is NOT greed, it's earned profit which is then used to make the company stronger and better. I don't have a problem with that!
 

gamerk2

Posts: 510   +410
Greedy? If you started a company wouldn't your goal be to produce as much revenue as you can? Would you prefer to live under communist rule where the government controls ALL aspects of commerce?

I will NEVER understand those that call companies greedy. The goal of EVERY company in the world is to make money, as much of it as they can. It is NOT greed, it's earned profit which is then used to make the company stronger and better. I don't have a problem with that!

The problem is who gets the revenue, and what it's ultimately used for. We're seeing more accumulation of wealth by the top few percent of the population, and it's starting to seriously strain the economy at large. Simply put, having a growing population having access to less money is not good for economic growth.

You also have billions upon billions that aren't even going to employees (even executives), but are being hoarded by the company itself all for the purpose of acquiring others, reducing competition and leading more towards a monopolistic market. You see this is pretty much every industry: You start with a lot of players, and left to its own devices, the industry will eventually coalesce around a handful of companies, that by and large try and avoid direct price competition in order to protect their profits.

Both these cases have the net result of strangling economic growth, which is driven first and foremost by consumer spending. More consumers with less money is bad for the greater economy.

Frankly, we need major corporate reform. A good place to start would be a tax on profits made by corporations that are not distributed to employees are returned to investors via a dividend, in order to reduce corporate acquisitions (which are mostly bad due to reduced competition). There also needs to be a new anti-trust act to make it harder for a handful of corporations to control large swaths of the market.
 

jpuroila

Posts: 323   +181
Greedy? If you started a company wouldn't your goal be to produce as much revenue as you can? Would you prefer to live under communist rule where the government controls ALL aspects of commerce?

I will NEVER understand those that call companies greedy. The goal of EVERY company in the world is to make money, as much of it as they can. It is NOT greed, it's earned profit which is then used to make the company stronger and better. I don't have a problem with that!
It IS greed. Wanting to have as much money as you can by whatever means you can get away with is pretty much the definition of greed.

Now, not all greed is a BAD thing, but the way the current system is set up, companies(and their executives) are pretty much mandated to do everything they can to increase their profits(up to and sometimes including breaking the law). THAT is bad. Just because communism is even worse doesn't mean capitalism in its current form isn't deeply flawed.
 

Danny101

Posts: 1,617   +693
Apple can still make the argument. If you don't want malware and viruses, only buy from our store. Of course some still slip through. They can tie warranty to using their store exclusively. But if you decide to seek apps from another store, then the warranty is terminated. App developers can sell within the Apple store at a premium price to save the warranty and sell outside of Apple at a reduced non-warranty price. I get both sides of the argument, but it really should be consumer's choice. Apple won't lose that much in store sells I believe. They may actually have an increase in device sells, with the additional store options, due to people eschewing Apple for not wanting to be stuck in their walled garden.