The European Commission published the final report of consumer IoT devices competition sector inquiry

The European Commission has published the findings of its competition sector inquiry into consumer IoT devices. The final report recognizes potential competition concerns identified in the preliminary June 2021. The main findings of the inquiry cover the following points: 

(1)  The characteristics of consumer IoT products and services, mainly the growth of consumer IoT devices and the increased availability of voice assistants as user interfaces.

(2) The features of competition in these markets, mainly the barriers to entering or expanding the sector (e.g., the cost of technology investment and competing with vertically integrated companies that have built their ecosystems within and beyond the consumer IoT sector). 

(3) The main areas of potential concern.

a. The existence of exclusivity, tying, and limited practices to use different voice assistants on the same smart device.

b. The dual position of voice assistants and smart device operating systems as intermediaries between users and consumer IoT services. This position, combined with their role in generating and collecting data, would allow them to control user relationships. 

c. Access to data, including information on user interactions with third-party smart devices and consumer IoT services by providers of voice assistants. This could improve the market position of voice assistant providers to leverage more easily into adjacent markets.

d. Lack of interoperability in the consumer IoT sector due to the prevalence of proprietary technology, leading at times to creating “de facto standards”. This means that a few providers of voice assistants and operating systems can control interoperability and integration processes and limit the functionalities of third-party smart devices.

The information collected for the inquiry will guide the Commission’s future enforcement and regulatory activity.