The European Commission and member state cartel watchdogs are concerned about competition in parts of consumer applications in the Internet of Things. “In the EU, Google Assistant, Amazon’s Alexa and Apple’s Siri are the main language assistants,” said Competition Commissioner Margrethe Vestager. “In addition, Google, Amazon and Apple provide the most important operating systems for smart home and portable devices, they offer digital services and they manufacture smart devices.” The role of these major players therefore needs to be further explored.

“In practice, these companies determine how different devices and services can communicate and interact with each other,” said the vice-president of the Commission in charge of digital. “In addition, language assistants learn a lot about their users. Internet of Things (IoT) smart gadgets and services have generated “a huge amount of data about what we do in our homes.” This could reveal some sticking points.

“Goalie”

Vestager bases his concerns on those published on Wednesday Preliminary results of the Commission’s sector inquiry into the markets for consumer IoT products and services. EU competition watchdogs initially left out the vast field of the industrial Internet of Things. The report confirms their view that the area is not only growing strongly, but that the market is already concentrating.

“We launched this sector inquiry because we suspected that gatekeepers might emerge in this area,” Vestager said. Such “gatekeepers” could abuse their power “to harm competition to the detriment of businesses and consumers”. Many economic operators in this sector were also concerned, as the first results of the analysis show. “But if we are to fully exploit the enormous potential of the Internet of Things for the daily lives of consumers, we need fair competition.”

Growing availability and distribution of voice assistants

As part of the investigation, the commission gathered information from more than 200 companies of different sizes in Europe, Asia and the United States in the sector covered. You have submitted a total of more than 1000 relevant trade agreements to the Brussels government institution, which have been incorporated into the report.

The paper shows that while the Internet of Things is still a relatively new field for consumers, it is increasingly part of the daily life of a larger community. There is a trend in the increasing availability and diffusion of voice assistants as user interfaces through which users can interact with various smart devices and IoT services.

Exclusivity and pairing practices related to voice assistants

A majority of participants identified the costs of technological investments and the competitive situation as the greatest obstacles to entry or expansion in this field. Many respondents complained that it was difficult to compete with vertically integrated international companies like Google, Amazon or Apple who have built their own ecosystems inside and outside the Internet of Things. As these players provided the most popular operating systems for smart and mobile devices as well as major voice assistants, they determined how other devices and services could be integrated into an IoT network.

For example, participants discussed some exclusivity and pairing practices associated with voice assistants. This means that it is often not possible to install different automated aids on the same device. The associated data processing enables service providers to play a key intermediary role and to control relations with users. This sometimes creates difficulties with the findability and visibility of your own IoT services. In addition, it would also allow large players to extend their central position to neighboring markets.

Dominance of proprietary technologies

Respondents also criticized the prevalence of proprietary technologies, which sometimes led to “de facto standards”. The absence of binding standards leads to technological fragmentation and poor interoperability. Some vendors have unilateral control over onboarding processes in order to restrict the functions of third-party services and put them at a disadvantage compared to their own. The Commission wants to put an end to such practices with the Digital Markets Bill (DMA).

The executive body is now asking as part of a public consultation for comments on the results before September 1. It plans to publish the final report in the first half of 2022. The recommendations contained therein are intended to serve as a basis for further work on DMA or for antitrust proceedings “on the basis of a case-by-case examination” .

(me)