The European Commission has announced an antitrust competition inquiry into the field of the Internet of Things (IoT) that deals with consumer-related products and services in the European Union (EU).
The sector inquiry will concentrate on consumer-related products and services that are connected to the network and can be controlled remotely, e.g., via a voice assistant or mobile device. These include smart home appliances and wearable items. Knowledge of the market gained through the investigation will contribute to the enforcement of competition law by the Commission in this sector.
Incharge of the EU’s competition policy, Executive Vice President Margrethe Vestager, said: “The consumer Internet of Things is expected to grow significantly in the coming years and become commonplace in the daily lives of European consumers. Imagine a smart fridge making your grocery list, you pulling up that grocery list onto your smart device and order a delivery from a shop that sends the groceries to your door that unlocks automatically with a word. The possibilities seem endless. But access to large amounts of user data appears to be the key for success in this sector, so we have to make sure that market players are not using their control over such data to distort competition, or otherwise close off these markets for competitors. This sector inquiry will help us better understand the nature and likely effects of the possible competition problems in this sector.”
In spite of the relatively early stage in the development of the Internet of Things sector (IoT) for consumer products and services in the European Union (EU), there are indications that certain company practices may distort competition structurally. The signs particularly concern restrictions on access to and interoperability of data, as well as certain forms of self-preference and methods related to the use of proprietary standards.
The Internet of Things (IoT) ecosystems are often characterized by strong network effects and economies of scale, which could lead to the rapid emergence of dominant digital ecosystems and gatekeepers. The competition sector inquiry will help the Commission gather market information that will help it to understand the nature, pervasiveness, and effects of the potential competition issues, as well as assess them in light of the European Union antitrust rules.
Sector inquiry will include all wearable products and connected consumer devices that are used in a smart home context, such as washing machines, fridges, smart TVs, smart speakers, and lighting systems. The sector inquiry will gather information on the services available through smart devices, such as music and video streaming services, along with the voice assistants that are used to access them.
If, after analyzing the results, the Commission identifies specific competition concerns, it may initiate case investigations to ensure compliance with the EU rules on restrictive commercial practices and abuse of dominant market positions in Articles 101 and 102 TFEU.
The investigation complements other actions launched as part of the Commission’s digital strategy, initiatives especially related to AI (artificial intelligence), data, and digital platforms.