Arizona advances bill that could force Apple to add alternative payment options in the App Store

The Arizona House of Representatives has narrowly advanced a bill that could require Apple to allow alternative payment methods in the App Store. Apple had been lobbying against this bill, but it passed in a 31-29 vote on Wednesday, and it could have major consequences for iOS and the App Store.

As the Verge reports, the legislation comes as an amendment to Arizona’s existing HB2005, and it would prevent Apple and Google from forcing developers to use a first-party payment system.

The amendment takes aim at App Stores that exceed 1 million downloads and says that those stores may not require “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.”

Theoretically, the bill could pave the way for developers to use third-party payments systems in the App Store. This would allow developers to potentially avoid Apple’s 15% to 30% cut on transactions and in-app purchases.

The passage of the bill is already receiving praise from the Coalition for App Fairness, which helped draft the bill.

“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 composed of Epic, Tinder parent company Match Group, and Spotify that is responsible for helping draft the bill.

“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,” the statement goes on to say. “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.”

Apple has not commented specifically on this Arizona bill, but a report from Protocol last week explained that the company has been lobbying against the bill. In addition to using its own lobbyist, Rod Diridon, Apple also hired Kirk Adams, the former chief of staff to Arizona Governor Doug Ducey and speaker of the Arizona House of Representatives.

From here, the bill must make it through the Republican-majority Arizona Senate, then it will reach the desk of Ducey. The odds of that happening remain unclear, but this Arizona bill has now made it further than a similar bill that failed in North Dakota.

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