On June 9, 2021, the Commission published a Preliminary Report[1] on the ongoing sector inquiry[2] into the Consumer Internet of Things (“Consumer IoT”), launched in July 2020[3] as part of the Commission’s digital strategy. The Preliminary Report summarizes feedback received from more than 200 stakeholders in relation to the following areas: (i) manufacturing of smart homes (e.g., lighting and security devices); (ii) voice assistants; (iii) provision of consumer IoT services (e.g., health and fitness services or creative content services); and (iv) manufacturing of wearable devices (e.g., smart watches). The main concerns expressed by the respondents are as follows:

  • Preventing consumers of smart devices to install a second voice assistant, thereby restricting consumer
  • Voice assistant providers may promote own or selected third-party services through default
  • Voice assistants collect quantum of data which may allow providers to control user relationships and data
  • There is only limited interoperability between the various products and services of the different providers, partly due to the lack of common This could “lock in” consumers to use certain devices in combination with specific services only.
  • Barriers to entry and expansion are significant because of the cost of investment and the competitive

The Commission subsequently launched a 3-month public consultation to canvas views on the Preliminary Report. The final report on the Consumer IoT sector inquiry is expected in the first half of 2022. The Commission might subsequently decide to initiate follow-on investigations.[4]

[1]      Commission Staff Working Document, Preliminary Report – Sector Inquiry into Consumer Internet of Things of 9 June 2021, SWD (2021) 144 final, available at: https://ec.europa.eu/competition-policy/system/files/2021-06/internet_of_things_preliminary_report.pdf.

[2]      Sector inquiries help the Commission to better understand and identify potential competition concerns and gain insights into a sector, its competitive landscape, and future trends.

[3]      See also, our July/August 2020 EU Competition Law Newsletter, p. 8.

[4]      Council Regulation (EC) No. 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, Article 17.