SPRINGFIELD – To strengthen Illinois’ tech economy, State Senator Sara Feigenholtz (D-Chicago) introduced legislation that would allow smartphone app companies to do business directly with their customers and avoid a fee to smartphone companies.
“Governments create fair marketplaces in every industry with appropriate protections for entrepreneurs and consumers. Our laws need to catch up to the smartphone app economy by providing the legal freedom for businesses and their customers to work directly together,” said Feigenholtz. “I also look forward to additional state taxes from Illinois businesses keeping more of their revenue instead of shipping 30% of it off to California monopolies.”
“Tech jobs are part of the future of our state’s economy and I’m excited to help grow our tech companies here,” said House sponsor Rep. Edgar Gonzalez, Jr. (D-Chicago). “The apps are what makes smartphones so valuable — my bill will encourage more innovation for new apps.”
Feigenholtz, alongside State Senators Robert Peters and Steve Stadelman and Representative Edgar Gonzalez, Jr., unveiled legislation Senate Bill 3417 Wednesday. The measure – known as the Freedom to Subscribe Directly Act – would provide smartphone app companies with the legal right to do business directly with their customers, overriding current smartphone app store policies.
“Local journalism is vital to our democracy, and this bill would protect our news companies who rely on subscribers from unfair fees — leading to more journalists on the beat in our state,” said State Senator Stadelman (D-Rockford), a long-time journalist in the Rockford region.
Current policies force customers to pay the smartphone company — Google or Apple — not the app company providing the service. Google and Apple charge as much as 30% of total revenues, extracting hundreds of millions from Illinois companies.
“Let’s recognize our new tech economy is dominated by out-of-state monopolies – the railroads of a previous era,” said State Senator Robert Peters (D-Chicago). “Just as the Illinois General Assembly crafted new laws to deal with monopolies back then, including creating the Illinois Commerce Commission, it’s our job to pass new rules to deal with the monopolies of our day.”
“The Freedom to Subscribe Directly Act will increase economic opportunities for Black innovators and entrepreneurs in Illinois and, if enacted, can serve as a model for states across the country,” said Arisha Hatch, Color Of Change vice president and chief of campaigns. “The Apple and Google duopoly has stifled Black economic viability in the tech industry. By exerting total power over their app ecosystems, these tech giants have imposed a stranglehold on app developers.”
“Basecamp has called Illinois home for over twenty years, so it’s with great pride to see our legislature finally stand up to the California tech monopolies. Apple and Google have gotten away with shaking down developers in our state for far too long,” said David Heinemeier Hansson, co-founder of Illinois app developer Basecamp and hey.com. “As a result, developers live in constant fear of expulsion from these dominant app stores unless they shut up and pay up. Our company dared to say no, but doing so meant risking our business, and the jobs we’ve created from it. The power of these tech monopolies desperately need to be countered by laws that ensure fair access to the app stores, ensures competition is possible on equal terms, and counter the retaliation these companies are so fond of exacting. The Freedom to Subscribe Directly Act does exactly this. We can’t wait to celebrate its passage!”
Senate Bill 3417 waits to be assigned to a committee for consideration.
To view a recording of the press conference, watch here.