Regulators should think twice before cracking down on ‘augmented reality’

A Milwaukee County regulation requiring special permits to use digital apps in county parks is facing a First Amendment challenge from the makers of augmented reality app Texas Rope ‘Em.

In a lawsuit filed in U.S. District Court for the Eastern District of Wisconsin,Candy Lab AR claims the Milwaukee ordinance infringes on the company’s freedom to publish the poker-themed video game. If the app maker prevails, it could set an important precedent blocking other localities from trying to curtail the scope and use of AR and location-based apps. This would represent a boon for competition, free speech and technological innovation.

Like the popular AR app Pokemon Go, Texas Rope ‘Em encourages players to visit real world physical locations to unlock achievements—in this case unlocking cards to complete their poker hand—and overlays a virtual world on the user’s physical surroundings.

{mosads}These apps attracted the attention of regulators last year when usage of Pokemon Go spiked to more than 22 million users worldwide. In some locales, the craze inspired responses from state, city and county lawmakers. Following concerns about littering and damage at Chicago’s Loyola Dunes Restoration Site, an Illinois state representative introduced “Pidgey’s Law,” which requires location-based apps to remove checkpoints within two days of a request.

Pokemon Go’s user base has since declined to less than 8 million daily active users, easing both public pressure further regulation. The Milwaukee County Board of Supervisors’ ordinance, passed earlier this year, remains a vestigial reminder of the initial panic.

While the panic may have passed, the costs of compliance with these laws remains. The Milwaukee ordinance forces innovators to pay as much as $1,000 for a use permit; to predict the dates, times and sizes of crowds who might be using the app in public spaces; and to offer estimates for security, medical services, garbage collection and bathroom use the app’s use would engender. 

For Pokemon Go’s smaller competitors, these compliance costs can mean game over. For example, while Pokemon Go has more than 100 million installs on the Android Store, Texas Rope ‘Em has less than 500. Unless the great bulk of those users just happen to live in Wisconsin, it’s unlikely that Texas Rope ‘Em is going to inspire a surge in Milwaukee County park visitations. 

As Candy Lab’s attorney has put it, the permitting scheme amounts to “passing two-dimensional laws in a three-dimensional world.” It is not the apps themselves that cause overcrowding or littering; it’s the decisions of their users. Rather than requiring permits, a better approach would be to find a way to charge park users a pass or entrance fee to protect specific crowded public areas, while ensuring that companies continue to experiment with creative apps.

Milwaukee County claims Texas Rope ‘Em is not speech protected by the First Amendment because “it does not convey any messages or ideas.” That argument likely will have to contend with precedent like the U.S. Supreme Court’s 2011 ruling in Brown v. Entertainment Merchants Association, which struck down a California law banning the sale of violent video games to minors. The late Justice Antonin Scalia explicitly began his majority opinion by declaring: “Video games qualify for First Amendment protection.”

What is for sure is that Candy Lab has gone all in to defend Texas Rope ‘Em. The case’s outcome could either immunize apps from overly restrictive local regulations or burden a budding market for location-based gaming and augmented reality applications. As companies like Facebook, Snapchat and Apple compete to include AR features in their platforms and hardware, this case becomes more critical.

Local legislators who want to mitigate the negative effects of AR applications should consider the benefits these apps bring to people and weigh the cost of compliance for entrepreneurial firms. Retrofitting existing regulatory frameworks onto digital constructs will not end well for policymakers, public safety officials or the app users this ordinance seeks to protect.

Anne Hobson (@AnneLHobson) is a technology policy fellow with the R Street Institute (@RSI).

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