S4047

An Act concerning digital application distribution platforms and supplementing Title 56 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. As used in P.L. , c. (C. ) (pending before the Legislature as this bill):

“Developer” means a creator of software applications that are made available for download by users through a digital application distribution platform or other digital distribution platform.

“Digital application distribution platform” means: (1) a digital distribution platform for software applications and services that are made available to users on general purpose hardware, including mobile telecommunications devices, smartphones, tablet computers, personal computers, and other general purpose devices that are connected to the Internet; and (2) a digital distribution platform that is either provided or used for only certain types of electronic devices, including certain grades of computing device, electronic devices that are made by only a particular manufacturer, or electronic devices that function on a particular operating system.

“Digital distribution platform” means a technology designed to stream digital content including, but not limited to, audio, video, gaming software, and software applications, to allow the digital content to be downloaded by a user in full.

“In-application payment system” means a software application, service, or user interface that is used to process payments from a user to a developer for software applications, digital and physical products, and services distributed through software applications.

“Provider” means a person or entity that owns, operates, implements, or maintains a digital application distribution platform or an in-application payment system.

“Special-purpose digital application distribution platform” means a digital distribution platform for single or specialized categories of software applications and services that are provided to users on hardware intended primarily for specific purposes, including gaming consoles, music players, and other special-purpose electronic devices that are connected to the Internet.

“User” means a person whose most recent address on record with a provider is located in this State.

2. a. A provider of a digital application distribution platform for which cumulative downloads of software applications from the digital application distribution platform to users exceed one million downloads in either the previous or current calendar year shall be prohibited from:

(1) requiring a developer that is domiciled in this State to use a particular in-application payment system as the exclusive mode of accepting payments from a user to download a software application, or purchase a digital or physical product or service through a software application;

(2) requiring exclusive use of a particular in-application payment system as the exclusive mode of accepting payments from users to download a software application or purchase a digital or physical product or service through a software application; and

(3) retaliating, in a manner that is deemed detrimental by the Attorney General, against a developer that is domiciled in this State or a user for using an in-application payment system or digital application distribution platform that:

(a) is not owned by, operated by, or affiliated with the provider; or

(b) is not owned by, operated by, or affiliated with the provider to distribute applications to, or accept payments from, users.

b. An agreement that violates the provisions of this section is unenforceable and is deemed a violation of P.L.1960, c.39 (C.56:8-1 et seq.).

c. The Attorney General shall receive complaints and investigate violations of the provisions of this section and may bring an action in any court of competent jurisdiction to obtain legal or equitable relief on behalf of a user aggrieved by the violation.

d. The provisions of this section shall not apply with respect to any special-purpose digital application distribution platform.

3. This act shall take effect immediately.

STATEMENT

This bill provides that a provider of a “digital application distribution platform,” as defined in the bill, for which cumulative downloads of software applications from the digital application distribution platform to “users,” as defined in the bill, exceed one million downloads in the previous or current calendar year is to be prohibited from:

1) requiring a developer of certain software applications (developer) that is domiciled in this State to use a particular “in-application payment system,” as that term is defined in the bill, as the exclusive mode of accepting payments from a user to download a software application or to purchase a digital or physical product or service through a software application;

2) requiring exclusive use of a particular in-application payment system as the exclusive mode of accepting payments from users to download a software application or purchase a digital or physical product or service through a software application; and

3) retaliating, in a manner that is deemed detrimental by the Attorney General, against a developer that is domiciled in this State or a user for using an in-application payment system or digital application distribution platform that is not owned by, operated by, or affiliated with the provider or retaliate against a developer for that use to distribute applications to, or accept payments from, users.

An agreement that violates the provisions of the bill is unenforceable and is deemed a violation of the State’s consumer fraud act. The bill is not to apply with respect to and “special-purpose digital application distribution platform,” as defined in the bill.

The bill provides that the Attorney General is to receive complaints and investigate violations of the provisions of the bill and may bring an action in any court of competent jurisdiction to obtain legal or equitable relief on behalf of a user aggrieved by the violation.