European Union Regulators Begin Antitrust Inquiry of Voice Assistants and the Internet of Things
The European Union is looking into potential antitrust problems with voice assistants and related Internet of Things products. Regulators at the European Commission have asked 400 companies about any issues that may lead to illegal anti-competitive activities in the consumer IoT and voice assistant market.
Smart Home Continent
The new EC investigation will cover any tech controllable at a distance and connected to a network, including wearables and smart home products. The regulators turned their eyes on voice assistants and IoT as a result of the wide range of user data collected by smart devices and concern that the companies behind these devices might use that information to suppress competitors. The choice is also likely due to the prevalence of IoT devices in their jurisdiction. There were 108 million smart home devices in Europe at the end of 2019, according to the EU, and they estimate the there will be 184 million by 2023, with a more than €27 billion market value. Though IoT encompasses a dizzying number of individual products, the EC is building its questions around the primary technology controlling them.
“And at the center of it all, there are voice assistants, like Apple’s Siri, Google Assistant, Amazon’s Alexa or Deutsche Telekom’s Magenta,” EC executive vice president for competition policy Margrethe Vestager said in a speech announcing the inquiry. “The potential is incredible. But we’ll only see the full benefits – low prices, wide choice, innovative products, and services – if the markets for these devices stay open and competitive. And the trouble is that competition in digital markets can be fragile. When big companies abuse their power, they can very quickly push markets beyond the tipping point, where competition turns to monopoly. We’ve seen that happen before. If we don’t act in good time, there’s a serious risk that it will happen again, with the Internet of Things.”
Inquiring Minds
European regulators have been watching voice assistant developers closely, especially since last summer, when reports that contractors were listening to audio recordings made by voice assistants like Siri, Alexa, and Google Assistant started emerging at a steady clip. Consumers and regulators were upset that private information people didn’t know was recorded could be heard by an unknown contractor. Almost every voice assistant developer paused or revised their contractor programs. Apple apologized for its program and changed it to an opt-in system, removing contractors from the equation entirely. But, in May, the original whistleblower who claimed contractors were listening to recordings made by Siri unmasked himself to urge a deeper look, claiming Apple hadn’t changed its practices much. Soon after, Ireland’s Data Protection Commissioner began looking into possible privacy violations by Apple.
Once the EC gathers the answers from the companies it is looking into, it will publish an initial report next spring, followed by the final version in summer, 2022. Depending on the results, it may start legal cases against companies violating its rules. That could mean some pretty large financial penalties as the EC can fine companies as much as 10% of their global revenue.
“The results of this inquiry should help us to spot situations where companies may have broken the competition rules,” Vestager said. “But the inquiry will do more than this. It will contribute useful information that can feed into the Commission’s regulatory initiatives that affect the Internet of Things – just as our last sector inquiry, into e-commerce markets, contributed to the rules against unjustified geoblocking. And it also sends an important message to powerful operators in these markets that we are watching them – and that they need to do business in line with the competition rules.”
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