Last month, a lobbyist approached Kyle Davison, a North Dakota state senator, with an unusual proposal: a law to stop Apple and Google from forcing companies in the state to hand over a share of their app sales.
Mr. Davison, a Republican, was focused on bills related to a $200,000 literacy program and birth records for the homeless. But he was intrigued by the lobbyist’s arguments that the tech giants were hurting small businesses, and he thought such a law could attract tech companies to North Dakota. So he introduced it.
“She said to me that this could be big. But to me, that means the local newspaper is going to come with a camera,” Mr. Davison, 60, said. “I would not be truthful if I said I expected the reaction.”
At the Capitol in Bismarck, a 21-story Art Deco tower that’s the state’s tallest building, a hearing on the bill last week drew Washington lawyers, North Dakota newspapers and Silicon Valley executives. Siding with Apple and Google was Americans for Prosperity, the conservative group funded by the Koch family. On the other side was the Fargo Chamber of Commerce. One person called in from Alaska.
Supporters of the bill said it would help smaller companies and only hurt Apple and Google’s revenues. Apple’s chief privacy engineer, Erik Neuenschwander, testified that the bill “threatens to destroy iPhone as you know it.”
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