31 August, 2021

ETNO response to the Public Consultation on the Preliminary Report on the Sector Inquiry into Consumer Internet Of Things

ETNO welcomes the European Commission’s (EC) aim to get a comprehensive understanding of the consumer Internet of Things (IoT) sector, and to assess whether competition in this sector may be restricted or distorted within the internal market.

As markets and technologies converge, European telecommunications providers have become increasingly entwined with wider consumer propositions and larger ecosystems. In the consumer IoT sector, our members typically provide the connectivity layer for smart devices. Additionally, several telecom service providers have their own IoT offerings – such as cloud-based platforms for the analysis of IoT data – and voice assistants.

The sector inquiry fits into the broader context of the EC’s Communication on Shaping Europe’s Digital Future and the current review of competition law instruments in light of digital economy developments. The European Digital Strategy noted that “Some platforms have acquired significant scale, which effectively allows them to act as private gatekeepers to markets, customers and information”. This is exactly the picture that emerges from the preliminary report with regards to the consumer IoT sector.

Furthermore, the inquiry is particularly timely as the findings and competition concerns raised by the respondents could not only improve competition law enforcement in the digital sector, but also feed into the work on the proposed Digital Markets Act (DMA). For instance, co-legislators should clarify that voice assistants are explicitly covered in the scope of the DMA, next to other ‘core platform services’ such as Operating Systems (OS) that are crucial nodes in the consumer IoT ecosystem.

Although voice assistants and smart devices (smart homes, wearable devices, mobile devices) are an emergent way to access consumer IoT services, it is necessary to highlight the crucial role of OS as key gateways for access to hardware (IoT devices) and to software (applications). The leading players of consumer IoT services (Google, Apple and Amazon), are capable to launch innovative services based on scale, as well as to create entry barriers and impose discriminatory conditions to third parties due to their vertical integrated ecosystems. Therefore, it is paramount to make the OS open and accessible for all third parties in a fair and non-discriminatory conditions to ensure competitiveness in consumer IoT services markets.

We appreciate the opportunity to comment on the preliminary report and its findings from the sector inquiry. More specifically, our response will mainly focus on the practices listed in Chapter 8, which might have a negative impact on competition, innovation and consumer choice in the consumer IoT sector in the EU, as well as on the recommendation for several actions that could be taken according to the tools the EC has at its disposal.

© ETNO 2022
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