IoT ecosystems are often characterised by strong network effects and economies of scale.
The European Commission has launched an antitrust competition inquiry into the Internet of Things sector for consumer-related products and services in the EU. 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. These include smart home appliances and wearable devices. Knowledge about the market gained through the inquiry will contribute to the Commission's enforcement of competition law in this sector.
Despite the relatively early stage of development of the sector for the IoT for consumer-related products and services in the EU, the Commission says that there are indications that certain company practices may structurally distort competition. In particular, there are issues regarding restrictions of data access and interoperability, as well as certain forms of self-preferencing and practices linked to the use of proprietary standards. IoT ecosystems are often characterised by strong network effects and economies of scale, which might lead to the fast emergence of dominant digital ecosystems and gatekeepers.
Therefore, through this competition sector inquiry, the Commission will 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 sector inquiry will cover products such as wearable devices (eg smart watches or fitness trackers) and connected consumer devices used in the smart home context, such as fridges, washing machines, smart TVs, smart speakers and lighting systems. The sector 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, after analysing the results, the Commission identifies specific competition concerns, it may open case investigations to ensure compliance with EU rules on restrictive business practices and abuse of dominant market positions in Articles 101 and 102 TFEU.
The inquiry complements other actions launched within the framework of the Commission's digital strategy, especially initiatives related to AI, data and digital platforms.
The Commission will send requests for information to a range of organisations active in the Internet of Things for consumer-related products and services throughout the EU. The Commission expects to publish a preliminary report for consultation in the spring of 2021. The final report would follow in the summer of 2022.