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The Government App Police, Federal Regulatory Creep

Frequent readers of this blog know that a recurring theme in our posts is that government meddling in the marketplace stifles freedom, innovation, and creativity. By and large, just about every type of human activity is regulated by federal or state rules. If you say nothing about it and sit on the sidelines, you will be regulated. This is especially true if you have a profitable or potentially lucrative product or service.

The Internet and other communications technologies have been an especially favorite target of federal regulators. In its infancy, the Internet remained fairly free and out of reach of the federal green eye shades; however, these days the entire information system is undergoing federal regulatory creep. Take the case Apps.

Apps, short for Application Software, are politically low-hanging fruit. According to some estimates by industry leaders, the sale of mobile device Apps next year could exceed $5 billion. From a federal regulatory and public policy standpoint this can mean only two things: taxes and content regulation. We’ll discuss taxes in a later post.

Earlier this week executives at Apple, RIM, and Google were warned (I could use another word but I want to keep this post somewhat diplomatic) by four U.S. Senators in a letter to remove DUI checkpoint Apps from their App stores. The four Democrats included Senate Majority Leader Harry Reid, Sen. Chuck Schumer, Sen. Frank Lautenberg, and Sen. Mark Udall. No Republicans signed on, at least not this time.

Drunk driving is an abomination and if you are stupid enough to try it, you should go to jail the first time they catch you. Apps that help drunks evade DUI checkpoints are just as dumb; however, if there is a market for them, and folks want to pay money for it, let it be. Keep reading.

Unless you stay quiet or allow it do so, the Government has no business telling App makers or providers what to design or not design. If Apple, Google, or RIM wants to voluntarily remove the App from their respective stores, either our of community consciousness or customer demands to do so, then that it is the way to approach this problem.

None of these companies are my clients; however, if they were, I would likely advise them to stand their ground and remove the App if it makes sense for them to do so (from a market or consumer position), and not because they received a letter from four powerful U.S. Senators. You can and must stay within the confines of the law; however, regulation by public policy is the enemy of innovation and creativity. It is government censorship – something that we can all agree is a bad thing.

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