Silicon Valley Needs to Stop Fighting and Sign a Free-Trade Agreement

by Lydia DePillis | December 14, 2012

The most dramatic trade war in the world today isn’t being waged between nations, but in cyberspace. And instead of tariffs on, say, grain or cars, the barrier is blocked apps. 

Take the latest photo-sharing dustup. Instagram started it, by preventing its cute square snapshots from loading on Twitter, forcing would-be viewers to click through to Instagram’s website, which is owned by its corporate parent Facebook. Within a week, Twitter retaliated by releasing a knockoff version of Instagram's atmospheric filters.

Meanwhile, another hot border war saw a ceasefire of sorts: Apple, which had kicked Google's mapping application off the latest version of its iPhone operating system, decided to accept a new iteration of the app, which was released Thursday. Of course, Apple didn't have much of a choice, after putting out its own miserably flawed mapping app, which was mocked most recently for sending Australians wandering in the desert. (Australian police said the app was causing users to take a “potentially life-threatening” wrong turn in a scorching state park where drinking water is scarce and cell-phone reception is even scarcer. Days later, Australian police also complained about the Google app, for sending drivers down the wrong way of of a one-way street in a heavily touristed town.)

Those are just this week's incidents. In recent years, Walmart has stopped selling Amazon's Kindles, Amazon has stopped allowing Google programs from running on Kindles, Facebook has kept its whole domain from being searchable by Google, Apple has excluded Google's YouTube app and kicked books out of iTunes for having too many links to Amazon's store, and Google has reminded everybody that it will block their sites if necessary. As citizens in this digital universe, we expect that all these social Web services be perfectly integrated with one another—after all, don't companies want to keep us happy, so that we keeping coming back for more? Sure. But only if we're using what they're making.

The metaphors used to describe this war are myriad. Platforms that exclude products made by other companies, like Apple's app store and Amazon's Kindle, are "walled gardens" or "closed ecosystems.” Forrester research analyst Sarah Rotman Epps characterizes these tech relationships as uneasy marriages of convenience, lasting only as long as one party needs a service the other came up with. "If they think they can replicate that service, and live without their partner, they get divorced," Epps says. Vanity Fair, meanwhile, likens these tenuous alliances and swift retaliations to the social dynamics of a high school cafeteria

The best framework for understanding how this new frontier functions, however, is the Economist's feudal model of GAFA: Google Apple Facebook Amazon, to which one might add the upstart princelings of Twitter and Square (and perhaps even Foursquare). It's a world full of egomaniacal monarchs and their warring fiefdoms, vying for control of new territories using whatever weapons available, from patent attacks to app blockades—and their loyal subjects are crying out for a cease-fire.

It’s time for these digital nations to set aside their differences, hold a summit in Palo Alto, and sign a free-trade agreement.

It's not that we don't want them to keep innovating and creating ever more delightful products. We just want them to allow the free flow of ideas across their borders, allowing us to choose the best from each. Why shouldn't I be able to reside in Facebookland, and still swap photos with my friends over in Twitterdom? As a builder of apps, shouldn't I be able to hawk my wares in Apple's domain as well as Amazon's? 

A free-trade agreement would also be good for the companies themselves. History has shown that protectionism is not a good strategy for long-term economic growth. As much as they'd like to think so, no one company can do everything better than all the others, so it makes sense for them to concentrate on their comparative advantage—allowing citizens to benefit from the tech world's full bounty, like Canada getting oranges in the winter from California. 

You might argue that placing tariffs or outright embargoes on another nation's products allows for the infant industries, like Apple's maps app, to incubate and grow stronger. But we, the residents of this cyberworld, are not utterly powerless. We can vote with our feet, and we may simply defect to another territory altogether.

There are already some signs of a negotiated detente. After a bloody year of proxy wars between Apple and Google's vassal Samsung over smartphone patents, the two monarchs have teamed up to divide the estate of the fallen Eastman Kodak company. There are also efforts underway to develop international standards for things like app privacy and copyright protection, removing the incentives for a global race to the bottom.

A comprehensive free-trade agreement between the rival factions, while maintaining healthy competition, would create a new era of choice and utility for consumers. It is my greatest hope that cyberspace's corporate warlords will convene this summit soon and hammer out a treaty—for the good of their subjects, and for the advancement of mankind.

Source URL: http://www.newrepublic.com//article/111107/silicon-valley-needs-stop-fighting-and-sign-free-trade-agreement