Prohibits digital application distribution platforms from requiring digital application developers to exclusively make their product available on such platform, or from requiring such developer to exclusively use such platform's digital payment system on such developer's digital application.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8835
SPONSOR: Kelles TITLE OF BILL:
An act to amend the general business law, in relation to prohibiting
certain exclusivity policies imposed by digital application distribution
platforms on digital application developers
PURPOSE:
Prohibits the owners of digital application distribution platforms from
imposing certain exclusivity policies on digital application developers.
SUMMARY OF PROVISIONS:
Sec. 1 - adds a new Article 45 to General Business law providing that
the owner of a digital application distribution platform with sales to
New York State that exceed $10 million in a calendar year cannot use
exclusive practices by requiring a developer to use either a digital
application distribution platform or a digital payment application.
Retaliation against a developer for choosing an alternative in either
case not permitted. Gives the New York State Attorney General the
authority to bring legal actions in such cases.
Sec. 2 - effective date.
JUSTIFICATION:
Large tech companies often require users and developers to process all
their transactions through a single app store or payment processor. In
doing so, they create walled gardens within their own proprietary plat
forms and reduce the ability of independent developers to distribute
their digital products through platforms of their choice. This increases
the profits of the large companies and denies options to both developers
and consumers, who may find better options through third party sellers.
This legislation seeks to level the playing field by prohibiting such
walled gardens in platforms in New York state and to protect customers
from monopolistic practices by large companies.
FISCAL IMPACT:
to be determined.
LEGISLATIVE HISTORY:
A6526 of 21-22
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
8835
IN ASSEMBLY
January 18, 2024
___________
Introduced by M. of A. KELLES -- read once and referred to the Committee
on Consumer Affairs and Protection
AN ACT to amend the general business law, in relation to prohibiting
certain exclusivity policies imposed by digital application distrib-
ution platforms on digital application developers
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The general business law is amended by adding a new article
2 45 to read as follows:
3 ARTICLE 45
4 DIGITAL APPLICATIONS
5 Section 1500. Definitions.
6 1501. Digital application distribution platforms.
7 § 1500. Definitions. As used in this article, the following terms
8 shall have the following meanings:
9 1. "Digital application" means any application software program or
10 group of programs designed to be downloaded or accessed on an electronic
11 device including, but not limited to a computer, smartphone, tablet, or
12 other similar device by an end-user.
13 2. "Developer" means the creator of a digital application made avail-
14 able for download by end-users through a digital application distrib-
15 ution platform or other digital distribution platform.
16 3. "Digital application distribution platform" means a digital
17 distribution platform for applications and services provided to a user
18 on an electronic device including, but not limited to, a smartphone,
19 tablet, computer, or other similar device.
20 4. "Special-purpose digital application distribution platform" means a
21 digital distribution platform for single or specialized categories of
22 digital applications, software, and services provided to an end-user on
23 special-purpose hardware including, but not limited to, a gaming
24 console, music player, or other similar special-purpose device.
25 5. "Digital payment application" means a digital application, service,
26 or user interface used to process a payment or money transfer from an
27 individual or entity to another individual or entity.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD14060-01-4
A. 8835 2
1 § 1501. Digital application distribution platforms. 1. A proprietor of
2 a digital application distribution platform for which cumulative gross
3 receipts from sales on such digital application distribution platform to
4 residents of this state exceed ten million dollars in the previous or
5 current calendar year shall not:
6 (a) Require a developer to use a specific digital application distrib-
7 ution platform as the exclusive mode of distributing a digital applica-
8 tion or other digital product;
9 (b) Require a developer to use a specific digital payment application
10 as the exclusive mode of accepting payment from a user to download a
11 digital application or purchase a digital or physical product through
12 such digital application; or
13 (c) Retaliate against a developer for choosing to use an alternative
14 digital application distribution platform or digital payment applica-
15 tion.
16 2. Any contract or agreement that violates this section shall be unen-
17 forceable and shall be deemed a violation of this section.
18 3. This section shall not apply to a proprietor of a special-purpose
19 digital application distribution platform.
20 4. The attorney general shall receive complaints and investigate
21 violations of this section and may bring an action in any court of
22 competent jurisdiction to obtain legal or equitable relief on behalf of
23 an individual aggrieved by a violation of this section.
24 § 2. This act shall take effect immediately.
