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North Dakota law could change the iPhone in a big way

Posted on February 16, 2021

State lawmakers in North Dakota will soon vote on a law that regulates the way Apple and Google do business with third-party mobile apps. 

Supporters of the law argue that it will help small businesses, and that it would rein in Apple and Google’s near-monopoly power in the world of mobile computing. Critics worry that it could undermine user safety, with one Apple exec saying it “threatens to destroy iPhone as you know it”.

In this short article, we’ll look at the proposed law, examine the arguments from both sides, and talk about what it could mean for the future of the iPhone.

What the North Dakota law would require

The proposed law was introduced by North Dakota State Senator Kyle Davison (R) as SB 2333. The text of the bill is short — just 2 pages long — and contains three main provisions:

  • Digital distribution platforms (such as Google Play and the App Store) can’t require app developers to distribute their apps solely through those platforms.
  • A digital distribution platform can’t force an app developer to accept payments only through the platform’s own payment processing service, or via in-app payments.
  • Digital distribution platforms aren’t allowed to retaliate against app developers who choose alternative distribution platforms, payment processing services, or in-app payment systems (“retaliation” would include banning the app from the distribution platform, or stopping end users from loading it onto their devices). 

How the law would affect iPhone users

For iOS users, the biggest impact would come from the fact that Apple could no longer force app developers to distribute their apps through the App Store. This would open the door to third-party iOS app distribution platforms like AltStore, all of which are currently unapproved. It would probably also mean a wider range of iOS apps, since apps that don’t conform to App Store requirements could be distributed elsewhere. 

The change would be welcomed by the iPhone jailbreak community, who have argued for many years that end users should be allowed to load non-App Store apps onto their iOS devices. Apple’s insistence on regulating what users can and can’t do with their iPhones has been a driving force behind the jailbreak movement — and it’s also why major iOS jailbreaks like unc0ver and checkm8 are such a big deal to Apple. 

Critics of proposed law, including some Apple software engineers, argue that alternative app distribution platforms would undermine the privacy, security, and performance that iOS users have come to expect from their devices. It’s a fair concern, given the way that the App Store has helped to keep iOS users safe from the sorts of malware threats that have plagued Android as a platform. They note that Android users are allowed to install apps from outside of Google Play (apps that haven’t been vetted by Google for security and privacy), and that it’s precisely Apple’s “walled garden” approach that makes iOS safer.

Yet others aren’t entirely convinced by the argument from security, pointing out that macOS allows third-party apps, and is generally considered to be a secure, privacy-friendly, and high-performance platform. The more “locked down” iOS, on the other hand, is clearly not immune to vulnerabilities, security issues, and even malware. And the iOS App Store, as safe as it’s purported to be, has also seen its share of problematic apps and borderline scams over the years. 

But all of that, of course, doesn’t even take into account the financial argument for the proposed North Dakota law…

The business of app distribution

The other major provision of SB 2333 is that app distribution platform owners like Apple wouldn’t be allowed to force app developers to accept payments through their platforms — which is how Apple is able to collect its high (and some would say extortionate) commissions on App Store sales. 

For this reason, the North Dakota bill is seen by many as friendly to small businesses — and in particular, iOS app developers. As things stand now, iOS devs have no choice but to give Apple a big cut of their app sales, ranging from 15% to 30%, if they want their apps to be available to iPhone users. Critics argue that Apple and Google have an effective duopoly when it comes to mobile computing, which is pretty hard to disagree with: if you want to make a mobile app in 2021, in 99% of cases it’s going to run on either iOS or Android. 

Apple’s refusal to allow alternative distribution platforms (and payment services) for iOS apps has drawn harsh words from lawmakers, who see this as an anti-competitive and monopolistic practice. As Congressman David Cicilline (D-Rhode Island) remarked:

Because of the market power that Apple has, it is charging exorbitant rents — highway robbery, basically — bullying people to pay 30% or denying access to their market … if there were real competition in this marketplace, this wouldn’t happen.

Prominent software developers like David Heinemeier Hansson have also been critical of Apple’s iron grip on app distribution, partly for business reasons, of course, but also on grounds of user choice. As Hansson quipped on Twitter last week: 

I know this sounds crazy, but hear me out: What if the computer in your pocket you paid $1,000 for could be freely used to run the software that you, the owner of said phone, would like to run? I know, I know. BANANAS IDEA. Could never work.

The future of the iPhone

The North Dakota State Senate is expected to vote on SB 2333 sometime this week. If it passes the senate vote, it will move on to the North Dakota House of Representatives for a vote there.

No one is too certain how the vote will go; Apple has reportedly been engaged in heavy lobbying against the bill, and they have the support of some influential business advocacy groups, including the powerful Americans for Prosperity organization.

Regardless of how things end up in North Dakota, the door is now open to future legal challenges to Apple’s app distribution monopoly. Lawmakers in Arizona will hear testimony this week on a similar bill that has been introduced in that state, and other state legislatures are likely to follow in the coming weeks and months.

No matter what happens in the future, it’s probably safe to say that the mere existence of alternative app distribution platforms or “unapproved” third-party apps won’t mean the end of iOS security. At most, security-conscious iPhone users will have to stick to iOS apps that come from the App Store, or to apps made trusted developers. In other words, they’ll just be following the same best practices that security-conscious Mac users do now!

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