Mark Zuckerberg recently posted his review comparing Apple’s augmented reality headset Vision Pro, with Meta’s version Meta Quest. Unsurprisingly, he found the Meta option to be a clear winner. What was more surprising was his prediction and implied desire that the future of the augmented and virtual reality space would be open.
While such interoperability is sometimes desirable, the system by which it comes about is equally important. When lawmakers are looking to mandate interoperability in tech for the short-term benefit of consumers, they should be careful not to undermine the systems that bring about long-term consumer prosperity.
Open systems largely rely on the principle of interoperability, which refers to the ability of products and platforms from different companies to integrate and be used in conjunction with each other. This principle can sometimes be best understood through the opposite which is referred to as walled gardens. These walled systems occur when companies design their services to be used within specific parameters and limits on who can access or make changes to these systems.
Popular examples include Apple, which has services like its App Store and iMessenger that work within an environment that Apple controls. For many, the Apple experience of a closed system is an added benefit of buying Apple products. Responding to iMessages across a phone, laptop, or watch adds convenience, and so does being able to access files and apps across different devices.
The reasons for such a system aren’t necessarily a glaring attempt to force consumers to use specific products. Meta even asserts that having a closed ecosystem is easier to maintain and results in a better customer experience.
However, consumers are not a monolith, and some value interoperability. This type of market pressure, in part, has resulted in new startups and tools designed to help users interact across different platforms and services. While traditionally a closed system with social networks, according to the recent video by Zuckerberg, Meta appears to be either embracing the idea or at least yielding to market pressure.
Unfortunately, not all pushes for interoperability rely on voluntary participation as shown in the European Union’s Digital Markets Act. U.S. lawmakers and regulators should avoid following this example.
Some consumers would likely benefit if companies were forced to interoperate with each other. However, the key question shouldn’t be whether there are some advantages, but whether or not mandatory interoperability would undermine protected ideas and institutions that generate even greater consumer benefits.
Two of the protections at stake with mandatory interoperability are intellectual property (IP) and private property. These two economic systems are worth protecting as they yield uncountable consumer benefits in the form of innovation and economic growth, which increase purchasing power.
In a working paper by John Talbott and Richard Roll, the authors found that of the mutable variables that accounted for more than 80 percent of international differences in gross domestic income, property rights were one of the most significant factors.
Intellectual property is also strongly connected to economic growth. In a meta-analysis of empirical literature the results found that, overall, protection of IP had a positive impact on economic growth and innovation, with this impact being stronger in developed countries. The strong protection of IP is also linked to a diverse form of firms investing in research and development (R&D).
While there is a middle ground to be found with IP protections, and reasonable people can disagree about where the line should be drawn, it is clear that a system that protects both IP and private property is a system that encourages economic growth and innovation. Both results are a win for consumers.
Policymakers should be careful and avoid sacrificing systems that offer long-term benefits for short-term gains. Yes, some consumers would benefit if all their products worked seamlessly together regardless of brand. However, those same consumers wouldn’t be better off if they never had access to innovative technology because the lawmakers forsook the systems and protections that incentivized such innovations in the first place.
Tirzah Duren is the Vice President of Policy and Research at the American Consumer Institute, a nonprofit educational and research organization. You can follow her on Twitter @ConsumerPal.