WASHINGTON,DC - JULY 11: Rep. Kat Cammack (R-Fla.) prepares for a TV interview at the Capitol in Washington, DC, on July 11, 2024. (Photo by Allison Robbert/The Washington Post via Getty Images)

The Washington Post via Getty Images

The sadly revived App Store Freedom Act tramples on property rights. But the latter is hardly its only demerit.

The Act recalls 2008. Back then, they all wanted to “rent” Warren Buffett’s name. “They” was financial institutions. With investors very much calling their present and future into question, banks and investment banks sought Buffett’s highly valuable imprimatur. If Buffett bought your shares, it was a sign your financial situation was sound. Simple as that.

Except that then and now, Buffett wasn’t going to buy just anything. See the hundreds of billions worth of cash equivalents sitting on Berkshire Hathaway’s balance sheet then, and now. Not just anyone gets to “rent” Buffett’s name as the implosion of various financial institutions brightly revealed nearly 18 years ago.

Pivoting back to the mis-named App Store Freedom Act, it would result in the regulation of “dominant” mobile app marketplaces with over 100 million users, and would among other things require them to allow third-party app stores onto their platforms. Most dangerously, the Act would enable “sideloading” of third-party apps as a way around the downloading of apps from official stores like Google Play Store or Apple App Store.

Proponents of the Act plainly don’t want to “rent” the names of Google and Apple, rather they want them for free. But they also claim that when there’s a free-for-all at prominent app stores, prices go down. The assertion isn’t serious. And that’s not just because a study conducted by the Analysis Group on the EU’s Digital Markets Act (DMA) revealed higher prices after the EU foisted a similar form of “app store freedom” on 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 accrue to the consumer. See Buffett yet again. Those who secure his seal of approval frequently see a subsequent rise in the value of their shares.

Which explains the desire of app developers to get their product on to the Apple App Store, Google Play Store, and others of prominence. If they can acquire such a valuable imprimatur on the legislative cheap, their path to charging higher prices is quite a bit smoother. Translated, if the most valuable tech companies in the world are carrying the product, the product immediately has greater market value than it otherwise would.

Of course, this speaks to why legislation is the worst way to try to force a market outcome. It’s not just that top app stores carefully curate digital shelf space with the shopper in mind, it’s that the value of their shelf space means they can command the best prices for their customers. Precisely because the most prominent app platforms are so popular, they can dictate pro-customer terms that the less popular ones cannot. Not so, when shelf space is legislated.

As stated in this opinion piece’s opening, the App Store Freedom Act tramples on property rights. Having created highly valuable digital spaces, Congress threatens to force the handing over of what’s valuable for nothing.

Which means the Act is also a price control: with Google, Apple and others having created something valuable, the App Store Freedom Act is in the process of trying to legislate a price ceiling of zero. Yes, a price control.

Except that by its very description, the Act is forcing something quite a bit worse than costless accession of what’s valuable. Which means the App Store Freedom Act is worse than a private property taking, and it’s worse than a price control. Vandalism generally is.