European Commission flags data accumulation concerns over Alexa

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Today, the Commission has published  the preliminary findings of its competition inquiry into the consumer “Internet of Things”.  

Sector inquiries help us identify potential competition concerns in markets where early intervention may be needed. This is all the more important in markets with strong network and scale effects that are growing and developing.  

The consumer Internet of Things is a relatively new sector and it is booming. For example, more than half of European citizens watched their favorite shows on a smart TV in 2020. Revenues from smart home appliances are predicted to double and reach almost 40 billion EUROS by 2025.

It is precisely because the Internet of Things is developing fast that we need to ensure it does so in a competitive way. All firms in this growing sector should have the same opportunity to innovate and bring new products and services to market.  We saw indications that some practices that we know too well may lead to tipping and to the emergence of gatekeepers. This is why we launched our sector inquiry less than a year ago. And from the preliminary results published today, it appears that our concerns are shared by many players.

It is too early to say but if some practices are confirmed, this could lead to new competition cases being opened in the future.

So far, the results of the sector enquiry confirm the central role of operating systems and voice assistants in the interconnection of different smart devices and services. Respondents flag that this may give providers of operating systems and voice assistants opportunities to engage in behaviors that negatively affect competition.   

In the EU, Google Assistant, Amazon’s Alexa and Apple’s Siri are the leading voice assistants. In addition, Google, Amazon and Apple provide the main operating systems for smart home and wearable devices, they offer digital services and they manufacture smart devices.  

In practice, these companies determine how the different devices and services can communicate and inter-operate with one another. In addition, voice assistants learn a lot about their users. Smart devices and Internet of Things services generate a huge amount of data about what we do in our homes.

Four main concerns have been reported in the enquiry so far. First, there can be restrictions on multi-homing; second, there are concerns about default settings and pre-installation on voice assistants; third, there are concerns about data accumulation and finally, there are interoperability concerns.