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HB2005 would benefit billionaires at expense of Arizona developers

iPhone 4s screen closeup with iTunes and App Store

If you read “It’s time to free ourselves from ‘Big Tech’ monopoly” by Reps. Regina Cobb and Leo Biasiucci, you might think Arizona’s economy hinges on the success of Candy Crush and Fortnite. And if you read a little further, HB 2005 is all about giving Arizonians relief from “Big Tech” for better prices on Cardinals skins to use in Fortnite.

While we don’t disagree the app economy is a critical part of Arizona’s growth, the sponsors of this bill are looking to put more money in the pockets of Epic Games, the makers of Fortnite, a video game juggernaut whose only presence in Arizona is on the smartphones of its players.

Morgan Reed

Morgan Reed

There’s no push in this legislation for expanded STEM/STEAM education to help fill the nearly 500,000 open jobs in the app economy. No mention of Covid related relief programs to help the 106,710 people employed by the state’s actual app economy stay afloat. In short, there really isn’t anything to help my members, the small to medium sized app developers creating telehealth apps so you can still see your doctor right now or the cloud infrastructure apps allowing you to work from home. To reduce the app economy to sports jersey skins and downloadable unicorns diminishes the economic contributions of our members in Arizona.

The companies that would benefit from HB2005, which passed the House 31-29 March 3, are billion-dollar companies that run Super Bowl commercials and hire A-list celebrities to perform virtual concerts in their game. My members can’t hire Travis Scott to promote their app. Instead, they rely on the marketing, payment processing, and security protections available in major app platforms like Apple’s App Store and Google Play. Platforms allow our members to reach a global audience that leverages the trust consumers have in their store policies to ensure an app won’t put malware on their phone. But HB2005 wants to trade privacy and security for a phantom consumer benefit coming from changing a payment processor.

While there are many legitimate payment processors out there like Square or Stripe, as written the bill would allow ANY third-party payment option, including perhaps two guys out of Lithuania who build one called “Circle” that steals your info, stores your money in Russia, and then abscond with it all after a month. By removing a platform’s ability to enforce its terms of service by deeming it “retribution,” Apple and Google can’t protect consumers from a fly-by-night developer committing fraud or identity theft.

The argument that this bill would reduce prices for gamers in Arizona is laughable. Video game prices are set by publishers across the board. A new top tier title will cost you $59.99 no matter if you drive to Best Buy, order it from Amazon, or download it through the Epic Games store. In fact, game prices for console and PC games, mysteriously carved out of this legislation, are set to increase to $70 in 2021 according to industry analysts.

So, let’s break down HB2005 to its essence — a billion dollar company with no presence in Arizona that knowingly broke its terms of service with app store platforms wants the state legislature to solve a contract dispute to “liberate” app developers and consumers. And if you believe that HB2005 isn’t a scam to benefit one company, I have a digital Pegasus with a battle hammer to sell you.

Morgan Reed is the president of ACT | The App Association which represents over 5,000 small to mid sized app developers and connected device makers around the world.

 

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