Today, almost all mobile apps are downloaded through Apple’s app store on iPhones or the Google Play app store on Android phones. As a result of this duopoly, Apple and Google can charge a 30 percent commission or “app tax” for paid apps sold in their store—though antitrust scrutiny has created some exceptions to that rule. They have also abused their gatekeeping power to ban apps like Parler.
A number of bills, such as the Open App Markets Act, now seek to solve the problems created by this duopoly. But some conservative groups in D.C. claim that the marketplace of app stores is working just fine.
These groups tend to argue that the current state of the market can only be explained by market forces, consumer choice, and the invisible hand. A perfect market like that, however, is about as common as a perfect person who never does anything wrong.
If you want to know how free a market actually is, you need to have some domain expertise in that market. What happens if you talk to actual app developers who have that expertise? You will learn that those who create iPhone apps choose Apple’s app store because that’s the only choice: Apple bans both sideloading and competing app stores on iPhones.
Developers flock to Apple not because of the invisible hand, but because of Apple’s visible hand, which bans competition.
And if Apple’s approach for iPhones can be described as aggressive, then Google’s convoluted 20-step sideloading process for Android phones can be described as passive-aggressive. Google’s actions are designed to create the perception of competition, not actual competition.
Let’s say you were buying a car at a Nissan dealership, and the dealer gave you two options. First, you can buy an incomplete car without a transmission. Second, you can buy a complete car, but you have to sign a contract saying you will only repair the car at Nissan dealerships.
In essence, that is what Google had done to phone manufacturers such as Samsung and LG. Instead of the transmission, though, they use an essential app called Google Play Services as leverage. According to an antitrust lawsuit filed against Google by 37 state attorneys general, the “great majority of the top paid and unpaid Android apps” depend on features that are provided by Google Play Services. Even Google’s own website says, “Apps may not work if you uninstall Google Play services.”
As the antitrust lawsuit notes, Google offers phone manufacturers two options. First, they can ship phones without Google Play Services. Second, they can ship phones with Google Play Services, but then they have to a sign an anticompetitive contract. As part of this contract, they must also preinstall Google Play (and many of Google’s own apps), make Google Play the default app store, and not display any other app store more prominently than Google Play.
And what if you don’t like Apple’s app store? In that case, it’s not as simple as switching app stores. To use Google’s app store, you need to buy an Android phone, and then learn how to use it. The market for app stores is one with very high switching costs; it’s certainly higher than the cost of switching from Netflix to Hulu, or from YouTube to Rumble.
Conservatives frequently complain that government bureaucrats have little to no understanding of the people and businesses under their thumb. Many conservatives in D.C., though, suffer from that same lack of understanding. They use all the right free-market buzzwords, but they don’t understand the markets they are talking about. And for that reason, they often oppose bills that would put meaningful checks on the Big Tech companies and their abuses of power.
When Kevin Roberts set out a new direction for the Heritage Foundation, he emphasized, “It is the job of conservatives inside the Beltway to better connect with conservatives outside the Beltway.” To do that, conservatives in D.C. need to understand the real-world experience of people outside D.C. When they talk about a market, they need to have some level of domain expertise that provides a real-world understanding of that market. When it comes to Big Tech, competition isn’t always one click away.
Mike Wacker is a software engineer and technologist who has previously served as tech fellow in Congress.
The views expressed in this article are the writer’s own.