Protect Consumers, Not Competitors

The Open App Markets Act (S. 2710) is the latest in a parade of antitrust legislation aimed at reining in “big tech” companies that mistakenly conflates the interests of competing companies with those of American consumers. It also erodes the bedrock principle of private property that is crucial for building the next generation of tech innovation and progress.

The bill, introduced by Sens. Richard Blumenthal (D-CT), Marsha Blackburn (R-TN), and Amy Klobuchar (D-MN) would force the biggest app stores—most notably Apple’s App Store, because it currently prohibits the practice—to allow side-loading of third-party apps. Apple has long prioritized security and integration for its customers over the more open approach this legislation would mandate. The advantage for Apple users is a “walled garden” that offers increased peace of mind thanks to a more closed and heavily vetted online ecosystem. Having voted with their wallets, millions of U.S. consumers seem to prefer that combination of benefits and restrictions.

But for those who would rather trade away some safety for more choice and flexibility, there’s the Google Play store and its Android operating system. Google already allows side-loading of apps onto its devices and its app store is accessible on a wide array of products. Millions of Americans seem to prefer this approach, in contrast to that of Apple’s.

Viva la difference!

But to force Apple into an approach more like Google’s would be to take consumer choice, which is a strange consequence for antitrust legislation. It’s not clear that degrading the advantages Apple offers is a tradeoff users have any interest in making. Better to let consumers exercise their own preference—and to try myriad other niche app stores beyond the App Store and Google Play—than to impose a one-size-fits-all regulatory regime that leaves them with fewer and degraded options.

Similarly, the bill’s prohibition on app stores requiring use of their own in-app payment system won’t necessarily benefit users. It would be good news for app companies big enough to offer their own payment system and looking to pocket the difference, but what will it mean for less tech-savvy consumers?

Many users want the security and ease of a trusted payment system baked into their device. Consumers may not realize any reduction of in-app fees, but will likely endure increased hassle when canceling third-party payment arrangements if outside payment systems are allowed. They may also be at a higher risk of bad actors gaining access to their financial information. Google and Apple having your payment information presents fewer potential headaches than relying on an unknown processor that may be halfway around the world. Many consumers would probably just prefer to not have to think about it either way.

At its most fundamental level, this bill degrades how app stores can use their private property. The curtailing of how a company may use its property to contract with others should require evidence of consumer harm or market failure. This evidence is lacking—or at least unknown.

The bill has not benefited from even one hearing where experts might have been able to air these concerns. Additionally, potential security risks surrounding the legislation’s interoperability requirements could have been evaluated had the bill been put through regular order. The bill’s proponents wave away many of those very real security harms by pointing to the privacy and security hypocrisy of some tech firms operating in China. Perhaps they have a point, but the security of American consumers deserves to be taken seriously and fully explored by lawmakers before it’s put at risk.

While there are complaints against Apple and Google from those who would like the government’s help in telling others what to do with their property, that’s far from U.S. antitrust law’s main objective: To prevent consumer harm. There are real costs for substituting regulators’ opinions for the judgment of businesses with skin in the game. Ultimately, consumers will pay the costs.

Why assume that the federal government knows better how to run an app store than the companies that built them? The history of markets versus regulation counsels against that assumption.