Rules for the Garden

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Article from Issue 252/2021
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There is this abiding faith within the Linux world that walled gardens and single-vendor control over global markets will eventually collapse under the weight of inefficiency. If you look at the history of the last 20 years, however, you would see a very different story.

Dear Reader,

There is this abiding faith within the Linux world that walled gardens and single-vendor control over global markets will eventually collapse under the weight of inefficiency. If you look at the history of the last 20 years, however, you would see a very different story. Just when the menace of the Microsoft monopoly began to subside, a whole new generation of walled gardens grew up around the mobile phone industry and the pecunious package managers we know as app stores. Apple, for instance, controls every aspect of their app store, forcing developers to agree to terms where Apple manages all the money and restricts the vendor's access to sales data and other background information. Google, owner of Android, is a little more open than Apple, but that isn't saying much. Critics contend that both companies stifle competition through their heavy-handed control.

Despite the excesses of the modern mobile app store, the case for any significant antitrust action within existing US law is not so clear. Apple, after all, has a relatively small share of the global cell phone market, even if they do exert monopoly-like control over the users who happen to fall into their walled garden. It is one of those cases where some direct and unambiguous legislation that leveled the playing field and created more competition would really help.

Last month, it seems, some real legislation did actually appear in the US Senate. The Open App Markets Act is an attempt to force competition into the mobile app marketplace. The bill would only apply to app stores with 50 million or more users, so it is clearly aimed at companies like Google and Apple, rather than at the many small-time vendors who are attempting to compete with the giants. If it passes, the bill would have several important effects. For instance, it would:

  • Stop app stores from forcing developers into using the app store's own payment system
  • Prohibit app store companies from punishing vendors who sell their apps for less elsewhere
  • Stop app store companies from using non-public sales data to create and market their own apps that compete with other products in the store

Note that this bill will not do anything about the other big global problems that commentators like me like to complain about. It does not stop user tracking or the epidemic of misinformation raging on the uncurated web. The focus is much more narrow, but maybe that narrow focus will increase the likelihood of success. The primary beneficiaries would be independent and third-party app developers, although the public as a whole would benefit if the measures lead to increased competition and a more open market.

As of now, the Open App Markets Act appears to have bipartisan support, but the process is just getting started, and don't expect Google and Apple to sit back and stay on the sidelines. Many promising ideas have met their fate in the US Senate, where politicians of both parties often find it safer to "take a stand" against things rather than taking a stand in favor. Lobbying efforts have already started to paint the bill as overreach or as pointless tinkering in an industry that is doing fine on its own. The lobbyists have many cards to play. The high tech industry, in general, is particularly adept at walking both sides of the street, appealing to conservative voters by sending the alarm that "government is interfering in business" and appealing to progressives with the warning that "government is intervening to restrict Internet freedom."

If the bill survives, however, it could be a promising first step at addressing a problem that has been percolating in the industry for years: the power of big companies to make themselves even bigger at the expense of everyone else.

Joe Casad, Editor in Chief

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