Big Tech’s Unlikely Next Battleground: North Dakota

Last month, a lobbyist approached North Dakota state senator Kyle Davison with an unusual proposal: a law to prevent Apple and Google from forcing companies in the state. Assign a portion of their app sales.

Mr. Davison, a Republican, focused on a $ 200,000 literacy program and bills related to the birth record of the homeless. But he agreed with lobbyists’ arguments that tech giants are hurting small businesses, and he thought such a law could attract tech companies in North Dakota. So he Introduced it.

“He told me that it could be big. But for me, it means that the local newspaper is going to come with a camera, ”said Mr. Davison, 60. “If I said I expected a response it wouldn’t be true.”

At Bismarck’s Capitol, a 21-story Art Deco tower that is the state’s tallest building, a hearing on the bill last week attracted Washington lawyers, North Dakota newspapers and Silicon Valley officials. The Americans for Prosperity, siding with Apple and Google, was funded by the Koch family by a conservative group. On the other side was the Fargo Chamber of Commerce. A person called from Alaska.

Supporters of the bill said it would help small companies and only harm Apple and Google’s revenue. Apple’s chief privacy engineer, Eric Neuchswander, testified that the bill “threatens to destroy the iPhone, as you know.”

North Dakota is part of a new front in the fight over Big Tech and its power. Frustrated by the lack of action from courts, regulators and Congress, tech rivals and critics are focusing their attention on state legislatures, pushing the bill that seeks to tax the largest tech companies, over their power. Rein in and limit their control over the Internet.

New york is To consider a bill This will make it easier for the state to pursue antitrust cases against big tech companies. Legalist in Florida this month proposed solutions, Supported by the governor, will limit how social media companies can police content on their sites. And friday maryland Made a law Which will tax online advertisements sold by companies such as Facebook, Google and Amazon. Connecticut and Indiana are looking at similar bills.

The problem of quarreling in the state is a formidable problem for tech companies, whose lawyers and advocates are trained to extinguish threats in Washington and the courts. The 50 state legislatures are diverse and unpredictable, with both Republicans and Democrats tying up against Big Tech.

North Dakota bill focuses on Apple and Google practices Up to 30 percent reduction from multiple app sales Last year, companies were given a combined package of $ 33 billion, according to estimates from app data firm Sensor Tower.

Some smaller companies have argued that Apple and Google force app makers to pay artificially high fees only because of their heavy dominance. The software of the two companies underpins almost all smartphones in the world.

The bill would prevent Apple and Google from requiring apps to use their payment systems, which would enable them to collect their commissions.

It would also require Apple and Google to allow users of their smartphones to download the app from outside their major App Store, although Mr Davison said he would remove that provision to ease the concerns of some of his colleagues Were trying Google already allows such downloads, but Apple does not.

The 47 senators from North Dakota are set to vote on the measure this week after the debate began on Monday. The timeline is accelerated because the legislature meets for just 80 days every two years. If a majority votes, the bill will run in the House.

If the bill fails, Apple and Google’s battle will appear remotely. Georgia and Arizona lawmakers are considering an almost identical app-store law, and Andy Vargas, a state representative in Massachusetts, said he planned to introduce a comparable bill this week. Lobbyists said they are also pushing for an app-store bill in Wisconsin and Minnesota.

An Apple spokesman said that most iPhone apps were free and did not pay any commissions. He said that most of North Dakota’s revenue-sharing companies with Apple earn less than $ 1 million per year from their apps, meaning they pay Apple 15 percent of some sales, instead of 30 percent. Apple Lower rates for small companies During an investigation into its App Store policies last year.

Google did not respond to a request for comment.

Mr Davison said he was given draft legislation by Les Bjork Anderson, lobbying with Odney Public Affairs in Bismarck. Ms. Anderson said in an interview that she was hired by the creators of Epic Games, the popular game Fortnite and Plaintiffs in lawsuits against Apple and Google On their app policies. He said he was also being paid by Alliance for App Fairness, A group of firms including Epic, Spotify and Match Group, which have opposed app commissions and are pushing for an app-store bill.

“Look, we’re a very conservative state,” said Ms. Anderson, a Republican. “But we are also a state where Teddy Roosevelt came from, and there is no great faith.” (Roosevelt, the former president, was born in New York, but later owned a farm in North Dakota.)

Still, she acknowledged that the bill may not have enough votes to pass, attributing it to confusion among some senators and aggressive lobbying by Apple.

“They are setting up a zoom call with every senator,” she said. “It doesn’t necessarily play well here – California officials or lobbyists are trying to tell people what to do.”

State Senator Jerry Klein, the Republican who led the bill’s handling committee, agreed that Apple’s presence was being felt in the Statehouse. He said he opposed the law in a big way because Apple and its lobbyists warned that the bill could put North Dakota at risk of cyber attack and subject North Dakota to costly lawsuits. He also expressed concern that interfering with an agreement between two private companies would be bad for the business.

Mr. Klein, 69, a retired grocery store owner of the younger Clansen, said some of his coworkers were deprived of passing a bill focusing on “digital application delivery platforms” and “in-application payment systems” when they Struggling to understand. effect.

“Everybody here knows that they got their phone plug-in, it has power, they can take pictures and show their grandchildren photos,” he said. “It goes beyond some of us.”

Yet some app makers have too much riding on the law. David Hinemeier Hanson, a Danish tech entrepreneur who has fought to avoid Apple’s fees with him Email App, Hey, Said the bill could be a significant blow to Apple’s policies, even though it would only apply to North Dakota companies.

He said that if the bill passed, he was ready to establish an office in North Dakota. And he predicted that if going there meant avoiding paying 30 percent of Apple’s sales, many other companies would join them.

“You don’t have to have a large share of a software company before 30 percent of revenue,” he said. He said he had never been to North Dakota, where the temperature dropped to minus 18 degrees Fahrenheit the other day, “but I think it’s lovely.”

Mr. Heninmyer Henson said he was not conditioned to adopt North Dakota’s law, but added that the bill is being taken into consideration and getting votes to allow other states to consider similar measures Will be encouraged.

“That’s why Apple showed with a big scary picture that it would end the iPhone as we know it,” he said. “As we know this iPhone will not be finished, it will have to pass in North Dakota. They fear that whichever state will first open the flood water, the flood water will be reopened. “

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