European Commission Launches Antitrust Inquiry into Consumer IoT

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European Commission Launches Antitrust Inquiry into Consumer IoT

The European Commission just launched an antitrust inquiry into the sector of Internet of Things for consumer-related products and services in the European Union.

The sector inquiry will focus on consumer-related products and services that are connected to a network and can be controlled at a distance, for example via a voice assistant or mobile device. Among these products are smart home appliances and wearable devices. The Commission hopes to use the knowledge about the market gained through this inquiry can contribute to the enforcement of competition law in this sector. Executive Vice-President Margrethe Vestager, in charge of competition policy, 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.

Margrethe Vestager: European Commission Launches Antitrust Inquiry into Consumer IoT

Margrethe Vestager – Executive Vice-President EU commission (Source: EU).

The Commission sees indications that certain company practices may structurally distort competition. Especially restrictions of data access and interoperability, as well as certain forms of self-preferencing and practices linked to the use of proprietary standards are mentioned. IoT-ecosystems are often characterized by strong network effects and economies of scale – which might lead to the fast emergence of dominant digital ecosystems and gatekeepers and could also present tipping risks. Through the announced competition sector inquiry, the Commission plans to gather market information to better understand the nature, prevalence and effects of these potential competition issues, and to assess them in light of EU antitrust rules. The inquiry will cover products like wearable devices as well as connected consumer devices like fridges, washing machines, smart TVs, smart speakers and lighting systems. The inquiry will also collect information about the services available via smart devices, such as music and video streaming services and about the voice assistants used to access them. If the Commission should identify specific competition concerns, it may open case investigations to ensure compliance with EU rules on restrictive business practices and abuse of dominant market positions. The inquiry complements other actions launched within the framework of the Commission’s digital strategy. In the next weeks, the Commission plans to send requests for information to a range of players throughout the EU. The companies concerned will include smart device manufacturers, software developers and related service providers. Under EU antitrust rules the Commission can require companies and trade associations to supply information, documents or statements as part of a sector inquiry. A preliminary report on the replies for consultation is expected in the spring of 2021. The final report will follow in the summer of 2022. The sector inquiry follows a number of other antitrust sector inquiries carried out in recent years in fields including financial services, energy pharmaceuticals, and e-commerce. More information can be found on DG Competition’s sector inquiry website.

Author: Rainer Claaßen
Image Credit: Pixabay

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