Illinois lawmakers consider measure to break app store monopolies

[March 09, 2022]  By Kevin Bessler | The Center Square

(The Center Square) – Legislation is being considered in Springfield that would protect smartphone app developers from Apple and Google, which take up to 30% of all revenues from some companies.

The proposed Freedom to Subscribe Directly Act would provide smartphone app companies with the legal right to do business directly with their customers, overriding current smartphone app store policies.

“I think it's clear that there is a growing bipartisan consensus on this that big tech firms have way too much power,” said Pat Garofalo, director of state and local policy at the American Economic Liberties Project.

Senate Bill 3417 is sponsored by state Sen. Sara Feigenholtz, D-Chicago, who said distributors are extracting hundreds of millions from Illinois companies.

Similar bills have been filed around the country, including in Arizona, New York, Florida and Minnesota. A similar bill in Arizona was recently rejected by lawmakers, the second year in a row bit technology firms have kept such legislation from advancing.

Apple and Google have been waging a public war with major developers who have revolted against their app store policies. Apple booted the video game Fortnite from its app store after the developer bypassed Apple to let players purchase in-game virtual currency directly from the company. Google quickly followed suit.

Erik Neuenschwander, an Apple Software manager, told lawmakers the legislation could jeopardize users, particularly children, as Apple’s app store includes parental controls on both content and in-app purchases.

If state level app store bills were to pass, tech companies said they would be put in a bind. If Illinois’ legislation passed, one of two scenarios develops. The first is that smart device providers could have to develop an entirely different app store for Illinois users. The second would be for these providers to restructure the entirety of their operation based around the regulation of a single state.

Garofalo said Illinois would look very tech-friendly with this law on the books.

“The state that does this is really friendly to this industry and wants to encourage entrepreneurship and innovation and the small developers who create a lot of jobs as they scale up, so I think whichever state that wins the race and gets there first is going reap a lot of the advantages,” Garofalo said.