The bill failed in the Senate by 36 to 11 votes on Tuesday, according to North Dakota House of Representatives member Karla Rose Hanson.
The bill sparked major controversy last week when a committee hearing drew the attention of corporate lawyers, lobbyists, experts and critics of Apple who argued in favor and against the proposed legislation’s potential far-reaching consequences.
The bill would prohibit any software distribution company with annual revenues of more than $ 10 million from imposing rules on developers that dictate that they use only one app store, and that they must use the app store owner’s preferred payment system.
Using Apple and Google’s payment system, these companies get 30 percent of most sales, according to their long-standing profit-sharing policies around app sales and in-app purchases.
Requiring developers to use the App Store and Apple’s payment system is the backbone of the iPhone maker’s mobile business and is largely responsible for the App Store’s continued financial success.
It is estimated that the App Store generated more than $ 64 billion in revenue last year.
Developers have long complained about Apple’s control of revenue streams across iOS, with critics claiming that its ever-changing rules are applied inconsistently and that the company grants waivers on a case-by-case basis.
Although the bill only specified how companies like Apple would operate within North Dakota, the broad language of the bill may have forced the company to make systemic changes to its business nationwide.
The success of the legislation could have inspired other states to follow suit in similar attempts to regulate app store relationships with developers.
In arguing against the bill, the iPhone manufacturer said: The bill threatens to destroy iPhones, arguing that it undermines the privacy, security, safety and performance built into the iPhone by design.
She added: We are working hard to keep bad apps out of the app store, and the bill may require us to allow those apps to enter.
The legislation is one of a growing number of government bills, which now include proposed bills in Arizona and Georgia that seek to place restrictions on the power of app store owners.