What you need to know
- The European Commission has published the preliminary results of its inquiry into the consumer Internet of Things (IoT) sector.
- The report has identified a few potential concerns, including prevalence of proprietary technology and accumulation of large amounts of data by "providers of smart device operating systems."
- The European Commission is expected to publish its final report in the first half of 2022.
The European Commission today shared the initial findings of its consumer Internet of Things (IoT) sector inquiry. The inquiry was launched in July last year as part of its digital strategy. Along with confirming the rapid growth of the Internet of Things market, the report highlights a few potential concerns with regards to the "current functioning of consumer IoT markets, as well as to their future outlook."
Executive Vice-President Margrethe Vestager, in charge of competition policy, said in a statement:
When we launched this sector inquiry, we were concerned that there might be a risk of gatekeepers emerging in this sector. We were worried that they could use their power to harm competition, to the detriment of developing businesses and consumers. From the first results published today, it appears that many in the sector share our concerns. And fair competition is needed to make the most of the great potential of the Internet of Things for consumers in their daily lives.
The Commission collected information from more than 200 companies operating in the consumer IoT markets across Europe, Asia, and the U.S. during the inquiry. A vast majority of the companies told the Commission that the cost of technology investment and the current competitive situation are the main barriers to entry or expansion in the IoT sector. They also reported difficulties in competing with tech giants such as Google, Apple, and Amazon that have their own ecosystems both within and beyond the consumer IoT market. For instance, Google's Wear OS powers some of the best smartwatches on the market. Google Assistant, on the other hand, can be found in a wide range of IoT devices, from smart speakers to smart TVs.
The European Commission is concerned about exclusivity and tying practices in relation to voice assistants, which limit the possibility of using multiple voice assistants on the same smart device. There is also concern among several respondents regarding the position of popular voice assistants and smart device operating systems as intermediaries between users and the consumer IoT devices and services market.
Additionally, the report raises concerns over the access and accumulation of "large amounts of data" by providers of smart device operating systems and voice assistants. Several respondents believe that this access allows tech giants such as Google to not just improve their market position but also "leverage more easily into adjacent markets." They also argue that the prevalence of proprietary technology is one of the main reasons behind the lack of interoperability in the sector.
The European Commission's preliminary report will now be subject to public consultation until 1 September. Until then, all interested parties will be allowed to raise further areas of concern in the consumer IoT sector. The European Commission is planning to publish its final report sometime in the first half of 2022.
Google declined to comment on the Commission's findings.
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