WASHINGTON, DC – JULY 11: Rep. Kat Cammack (R-Fla.) prepares for a televised interview on Capitol Hill in Washington, DC on July 11, 2024. (Photo by Allison Robbert/The Washington Post via Getty Images)
The Washington Post via Getty Images
The unfortunately revived App Store Freedom Act encroaches on property rights. But the latter is not its only drawback.
The law is reminiscent of 2008. Back then, everyone wanted to “rent” Warren Buffett’s name. “They” were financial institutions. With investors questioning their present and future, banks and investment banks sought Buffett’s highly valuable authority. If Buffett was buying your stocks, it was a sign that your financial situation was good. So simple.
Except then and now, Buffett wasn’t going to buy anything. See the hundreds of billions worth of cash equivalents on Berkshire Hathaway’s balance sheet then and now. He cannot “rent” Buffett’s name, as the collapse of various financial institutions nearly 18 years ago brilliantly revealed.
Going back to the flawed App Store Freedom Act, it would lead to the regulation of the “dominant” mobile app markets with more than 100 million users and, among other things, require them to allow third-party app stores on their platforms. Most dangerously, the law would allow “sideloading” of third-party apps as a way to bypass downloading apps from official stores like the Google Play Store or the Apple App Store.
Proponents of the law apparently don’t want to “rent” the Google and Apple names, but want them for free. But they also claim that when there’s a free-for-all in prominent app stores, prices drop. The claim is not serious. And this is not only because a study carried out by the EU Digital Markets Law (DMA) Analysis Group revealed higher prices after the EU encouraged a similar form of “app store freedom” to app stores operating in Europe.
Study or no study, it’s easy to see why legislated access to the most popular app stores wouldn’t come from the consumer. See Buffett again. Those who secure his seal of approval often see a subsequent rise in the value of their shares.
This explains the desire of app developers to take their product to Apple App Store, Google Play Store and other major ones. If they can acquire such valuable authority on the legislative cheap, their path to charging higher prices is considerably smoother. Translation, if the world’s most valuable tech companies carry the product, the product immediately has a higher market value than it would have otherwise.
Of course, this shows why legislation is the worst way to try to force an outcome on the market. Not only do the top app stores carefully curate their digital shelf space with the shopper in mind, but the value of their shelf space means they can get the best prices for their customers. Precisely because the most prominent app platforms are so popular, they can dictate terms in favor of customers that the less popular ones cannot. Not so when shelf space is legislated.
As mentioned at the beginning of this opinion piece, the App Store Freedom Act violates property rights. Having created digital spaces of high value, Congress threatens to force the surrender of what is valuable for nothing.
Which means the law is also a price control: with Google, Apple and others having built something valuable, the App Store Freedom Act is in the process of trying to legislate a zero price cap. Yes, price check.
But by its very description, the law enjoins something far worse than wanton inclusion in what is valuable. Which means the App Store Freedom Act is worse than a private property, and it’s worse than a price control. Vandalism in general is.
