Minnesota legislators consider restrictions on Apple, Google app stores

Minnesota legislators are encountering sharp opposition from some in the technology sector as they consider a bill that would limit Google and Apple's control over app developers.

The measure would block Big Tech companies from requiring developers to exclusively use one app store or only use an in-app payment system.

"We've got a real problem here, because Apple and Google have established themselves as the only gatekeepers of the mobile internet. It's 21^st century monopolies," said bill sponsor Rep. Dan Wolgamott, DFL-St. Cloud.

Members of Congress, including Minnesota Sen. Amy Klobuchar, are also pushing federal legislation aimed at breaking up Apple and Google's hold on the market. And a number of states from Hawaii to North Dakota have introduced bills similar to the one Minnesota leaders debated last week.

Legislators on both sides of the aisle support the measure, with Sen. Mark Koran, R-North Branch, sponsoring it in the Minnesota Senate. The bill was introduced at the State Capitol last year, but failed to advance.

It would prevent technology companies from retaliating against developers who opt to use a different app store or payment system. The state attorney general's office would be in charge of enforcing the law, which would apply only to app stores that made more than $10 million last year, such as Google Play and Apple's App Store.

Lawmakers have run into a wave of opposition from some technology companies.

The bill in Minnesota "would destroy the existing app ecosystem that has allowed developers to access billions of global users while providing consumers with a safe, secure, and convenient place for users to search for apps," Tyler Diers, the Midwest executive director of an organization of technology executives called TechNet, wrote to legislators.

He said the app stores provide benefits to developers and consumers, including infrastructure to block restricted content like hate speech, prevent spam and manage secure payments. "Without these resources that are available to all developers, the app market would be balkanized, confusing, and expensive for both developers and users," he warned.

But Wolgamott said the current system is creating barriers for small app developers, reducing competition and driving up prices for consumers. He noted that Google and Apple have been taking a significant cut of the sales made through their app stores, imposing a service fee of up to 30% on some companies.

Will Cunningham with the online dating company Match Group told lawmakers Wednesday that app store fees are one of their largest and fastest growing expenses. But businesses like theirs are stuck paying the high rates because there is no alternative, he said, adding, "If you don't have an app, your businesses might as well not exist."

Meanwhile, Congress continues to consider the Open App Markets Act, which is similar to the proposal Minnesotans are debating. A U.S. Senate panel advanced the legislation last month with bipartisan support.