Taking on Apple Store & Google Play Store

An important debate is taking place in the Arizona legislature over one of the ways dominant Big Tech companies Apple and Google maintain massive profits. Fortunately, Arizona State Representative Regina Cobb (R-Kingman) is taking on the Apple Store and Google Play Store duopoly to give consumers lower prices and more choices.

Recently, Rep. Cobb’s bill (HB 2005) passed the Arizona House of Representatives with bi-partisan support despite the efforts of Big Tech lobbyists. The bill must now pass in the Arizona State Senate. Final passage would prevent Apple and Google from locking small software developers into their payment systems (the app stores) where they charge some developers 30% of the cost of the app when consumers check out.

Visa and Mastercard, which together control similar anti-competitive card network payment systems, collect a transaction fee of 1-4% from merchants and retailers. Visa and Mastercard then share with their member banks — collecting more on airline rewards credit cards, less on plain debit cards. While the card networks have what antitrust experts call “market power,” there are other choices, including other card companies, such as American Express, and other ways to pay, from cash to Paypal.

However, the powerful Big Tech firms completely control access to the growing app systems on their Google Android and Apple iPhone smartphones. Their cut off the top of as much as 30% is an unfair practice that forces app developers to raise their prices to consumers and leaves them with less money to innovate. And if they don’t want to pay they lose access to customers.

As consumers, we can change where we bank or where we shop, but the developer is left with only two app stores. A major report released by Congress last fall found: “it is unlikely that a new, competitive app store will be able to successfully challenge the existing, dominant app store operators.”

Arizona PIRG is pleased to support legislation that takes on Big Tech to help consumers and small businesses rein in the Apple Store and Google Play Store duopoly. We look forward to this legislation getting to the governor’s desk and him signing this bill into law.