Bill tries to bring Apple and Google app stores under control

CEO and cofounder, Chris Anderson, spoke before a congressional committee in support of a measure that would limit Apple and Google’s authority to control the way some online transactions are done. When customers make certain purchases using smartphone apps, the two pending measures at the Illinois General Assembly will put an end to the authority of technology giants such as Apple and Google to control how businesses do and the amount of cuts they earn from such trades.

If enacted, the bill would make Illinois the first state to regulate that part of the e-commerce industry, but a broader bill is still pending in Congress where it appears to have isolation support. Currently, app developers pay for the Apple App and Google Play Store annually to share their apps on those services. In addition, however, Apple and Google share a common ground on what is known as “digital” businesses such as dating services, news services or digital music – those that do not just buy goods or services physical.

Those commissions accounted for 15 percent of the transaction on the first $ 1 million of sales, and 30 percent of all transactions above that. “I was there in the technology industry the last time the US government pursued a major technology monopolist with a lawsuit (Department of Justice 2001) against Microsoft,” said David Heinemeier Hansson, CEO and founder of software company based on Chicago Basecamp, told Senate Committee Tuesday.

“What Apple and Google are doing today is making what Microsoft did then look like a child’s game,” he said. “Given its power and pride, Microsoft did not even think they could levy a tax on all software running on Windows operating system. But that is where we are today, Apple and Google are demanding a cut of 30 percent of revenue for the ever-increasing share of transactions on their platforms. ”

Two bills are pending at the General Assembly that will give Illinois-based app developers more control over their app-based sales, Bill 3417 and Bill House 4599, creating “Freedom from Subscription Direct Law.” It will prevent major app sharing platforms like the App Store and Play Store from requiring Illinois-based app developers to use an in-app payment system as an exclusive mode of accepting payments.

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