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.
Senior Director, Federal Consumer Program, PIRG
Ed oversees U.S. PIRG’s federal consumer program, helping to lead national efforts to improve consumer credit reporting laws, identity theft protections, product safety regulations and more. Ed is co-founder and continuing leader of the coalition, Americans For Financial Reform, which fought for the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, including as its centerpiece the Consumer Financial Protection Bureau. He was awarded the Consumer Federation of America's Esther Peterson Consumer Service Award in 2006, Privacy International's Brandeis Award in 2003, and numerous annual "Top Lobbyist" awards from The Hill and other outlets. Ed lives in Virginia, and on weekends he enjoys biking with friends on the many local bicycle trails.