European Union Report Describes Unfair Competition in Voice Assistant and Smart Home Markets

The European Union has published the first version of a report on competition and potential antitrust issues in the voice assistant, Internet of Things (IoT), and smart home device market. The inquiry began last July and gathered opinions from more than 200 companies on the topic. After a few months of revisions, the European Commission will use the final report to draft any potential policies and rules surrounding the industry.

Trust Talk

The report draws from surveys filled out by leaders of companies across Europe, the U.S. and Asia. Regulators asked companies about their views of the industry, what the tech is like, the shape of competition in the market, and any possible concerns about how they are being regulated and what the industry will look like in the future. The general consensus was that smart devices and voice AI are accelerating technologically and their share of the overall market. There are more voice assistants in more places than ever as people become more comfortable with the tech, and the EC estimated the approximately 4.2 billion voice AIs in 2020 would double to 8.4 billion by 2024.

As for friction and stumbling blocks for growth, the companies cited the sheer cost of development as the biggest issue, but competitive barriers also pointed to as a formidable obstacle. The tech giants with extensive and comprehensive tech ecosystems like Amazon, Apple, and Google make it particularly hard to break through in any meaningful way, the report states. The dominating presence and exclusivity of their devices and respective voice assistants shut out rivals before they have a shot, some of the companies said. In addition, there aren’t any official standards for the tech, which makes the biggest companies the owners of default standards smaller companies may feel forced to work with, even as they have to build for multiple standards when interoperability is limited.

“When we launched this sector inquiry, we were concerned that there might be a risk of gatekeepers emerging in this sector. We were worried that they could use their power to harm competition, to the detriment of developing businesses and consumers,” Commission executive vice president in charge of competition policy Margrethe Vestager said in a statement. “From the first results published today, it appears that many in the sector share our concerns. And fair competition is needed to make the most of the great potential of the Internet of Things for consumers in their daily lives.”

Regulating Change

The report now will accept further feedback and potential insights over the summer, with the comments closing at the beginning of September. The final report is expected in the first half of 2022. The report could significantly impact any Digital Markets Act, a proposed regulatory framework the EC has begun debating.

“This analysis will feed into our future enforcement and regulatory action, so we look forward to receiving further feedback from all interested stakeholders in the coming months,” Vestager said.

The tech giants have been attempting to head off rules that they deem too strict with a mix of self-regulation and PR blitzes. It didn’t take long for Amazon to issue a statement on the matter, assuring its belief in the importance of competition and touting its efforts to address some of the topics in the report.

“There is intense competition from many companies in the smart home sector,” an Amazon spokesperson wrote in the statement. “There will not, and should not, be one winner. We recognized this from the beginning and designed Alexa accordingly. Today, Alexa is compatible with over 140,000 smart home products, and we make it easy for device makers to integrate Alexa directly into their own products. We also founded the Voice Interoperability Initiative — now 80 companies strong — which is committed to giving customers the choice and flexibility to access multiple voice services on a single device.”

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