App Store Regulation Hits Texas
SB 2420 passed. The Attorney General will decide what it means. Companies that participate in that process will shape the rules. Everyone else will just follow them.
The Bottom Line
Texas has become one of the first states to regulate app store economics. SB 2420 targets platforms that distribute software applications for mobile devices — meaning Apple's App Store and Google Play are squarely in the crosshairs, along with any company operating similar platforms.
The statute is deliberately broad. Key terms like “platform,” “software application,” and “mobile device” will need interpretation. The Attorney General's office will issue guidance — and that guidance will determine compliance costs for affected companies.
This is bigger than app stores. The same legislative session produced HB 4395 (electronic securities submissions) and SB 1106 (digital transparency for public improvement districts). Together, these bills signal a broader push to regulate digital transactions and mandate electronic disclosure.
SB 2420: What You Need to Know
Compliance Urgency
CriticalCost Impact
HighPrimary Author
Sen. Angela Paxton (R)
Who's Affected
- →App Store Operators: Apple, Google, and any platform distributing mobile software
- →App Developers: Companies whose apps are distributed through regulated platforms
- →Payment Processors: Companies handling in-app purchases and subscriptions
- →Game Publishers: Mobile gaming companies with Texas users
What's NOT Settled
Definition of “Platform”
Does this cover only app stores, or also enterprise software distribution, gaming platforms, or IoT device ecosystems? The AG's office will need to draw lines. Companies on the margin should engage early.
Who decides: Texas Attorney General's Office
Enforcement Mechanisms
The statute creates new requirements but the enforcement details — investigation procedures, penalty calculations, safe harbors — will be developed through rulemaking or AG guidance.
Who decides: Texas Attorney General's Office
Federal Preemption Questions
Affected companies may argue federal law preempts state app store regulation. How aggressively the AG's office pursues enforcement may depend on how these legal questions develop.
Who decides: Courts (eventually), AG posture (initially)
Electronic Securities Standards (HB 4395)
The bill mandates electronic submission and delivery of public securities records. Technical standards — file formats, security requirements, retention periods — are left to implementing agencies.
Who decides: Bond Review Board, potentially Comptroller
What Smart Operators Are Doing Now
Engage the AG's Office Early
The Attorney General will issue guidance before January 1. Request meetings with the Consumer Protection Division to understand their enforcement priorities and provide industry perspective.
Map Your Texas Exposure
Document your platform operations, payment flows, and developer relationships that touch Texas users. Understanding your exposure is prerequisite to compliance planning.
Build Your Coalition
Other affected companies share your interests. Coordinated engagement with regulators and legislators carries more weight than individual outreach. Identify potential allies.
Plan for the 90th Legislature
SB 2420 may be amended or refined in 2027. Building relationships with key legislators now positions you to shape future modifications rather than react to them.
How We Help
JD Key Consulting works with technology companies navigating Texas regulatory requirements. Our strength is in agency engagement and legislative strategy — helping clients shape how new laws are implemented, not just react to requirements after they're finalized.
- Strategic engagement with the Attorney General's office on SB 2420 guidance
- Coalition building among affected technology and payment companies
- 90th Legislature positioning for potential statutory amendments
Shape the Rules Before They're Written
The AG's office is developing enforcement guidance now. Companies that engage will influence the outcome. Let's discuss your Texas technology exposure.
Frequently Asked Questions
What is Texas SB 2420 app store regulation?
SB 2420 is Texas legislation effective January 1, 2026 that regulates mobile app distribution platforms. The law targets app store operators like Apple and Google, creating new requirements for how they distribute software applications to Texas consumers. The Attorney General's office will issue enforcement guidance defining key terms.
Which companies are affected by Texas app store regulation?
SB 2420 affects app store operators (Apple App Store, Google Play, and similar platforms), app developers whose products are distributed through regulated platforms, payment processors handling in-app purchases, and mobile gaming companies with Texas users. Companies uncertain about coverage should engage the AG's office early.
How will Texas SB 2420 be enforced?
The Texas Attorney General's office has enforcement authority over SB 2420. The office is developing guidance on key definitions like 'platform,' 'software application,' and 'mobile device.' Enforcement mechanisms, investigation procedures, and penalty calculations will emerge through AG guidance and potential rulemaking.
When does Texas app store regulation take effect?
SB 2420 takes effect January 1, 2026. However, the Attorney General's office is developing implementation guidance now. Companies that engage before the effective date can influence how the law is interpreted and applied to their specific operations.
Does federal law preempt Texas app store regulation?
Federal preemption is an open question. Affected companies may argue federal law preempts state app store regulation, but until courts rule, companies should prepare for Texas enforcement. The AG's posture on enforcement may depend on how these legal questions develop.