Illinois Bill Could Force Apple’s App Store to Allow Alternative Payment Methods

App Store

A new bill called the Freedom to Subscribe Directly Act has been filed by the state of Illinois, which aims to stop tech companies such as Apple and Google from taking a cut of profits from local app developers. Essentially, the act would allow developers to use alternative modes of payment on the Apple App Store, bypassing its current policies. Last year, Arizona tried to pass a similar bill, but it died out due to lobbying by Apple and Google.

Illinois-based company Basecamp is one of the biggest supporters of the bill, WGEM reports. The company’s co-founder David Heinemeier-Hansson said that Apple rejected Basecamp’s HEY email service because the developers refused to add an IAP option to the app.

Apple demanded we sell our new service through their payment processor, so they could take their 30% cut, or we’d be thrown out of the app store. Basecamp might have among the few companies willing to speak up but we are far from the only ones dealing with these oppressive regimes.

Heinemeier-Hansson has been a staunch supporter of various state bills that try to provide alternative App Store payment options. The states of Arizona, Minnesota, and North Dakota have all proposed bills to bypass in-app purchases in the past. However, the bills were eventually scrapped owing to intense lobbying by Apple and Google against them.

When Apple takes a 30 percent commission on in-app purchases, the revenue from the corporate tax goes to the state of California, where the company is based. Illinois senator Sara Feigenholtz said, “As we try to modernize our revenue base, we as a state must tap into lost revenues. We need to keep big tech in check.” Feigenholtz noted that Illinois “lost out on $1 billion in tax revenue” in the past year.

The iPhone maker has been facing a lot of pressure around the world to revise its App Store policies. It was recently forced to allow alternative payment methods in South Korea and the Netherlands. However, it still collects a commission on the transactions.

[Via WGEM]
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