EU Launches IoT Competition Probe to Curb Data-Driven Market Risks
Why the EU Is Investigating Smart Device Markets
The European Union has initiated a sweeping sectoral inquiry into the Internet of Things (IoT) amid growing concerns that connected devices and voice assistants could distort market competition through unchecked data collection. The probe targets smart home devices and connected technologies, with regulators seeking to preempt potential antitrust violations before they irreversibly alter market dynamics.
Key Details of the Investigation
- Scope: 400+ questionnaires sent to companies across Europe, Asia, and the US
- Focus: Data collection practices, interoperability barriers, and market dominance risks
- Timeline: Preliminary report and public consultation expected in early 2023
The Data Competition Threat
In a statement, EU Competition Commissioner Margrethe Vestager outlined clear risks:
“Voice assistants and smart devices collect vast amounts of behavioral data. There’s danger that dominant players could misuse this data to entrench their market position or even expand into adjacent markets.”
Vestager highlighted familiar antitrust concerns:
- Self-preferencing: Companies steering users toward their own products/services
- Exclusive deals: Contracts that lock out compe*****s
- Interoperability barriers: Devices that don’t communicate across ecosystems
Broader Regulatory Context
This inquiry builds on several EU digital market initiatives:
- Digital Services Act: Upcoming platform liability reforms
- Ecommerce Rules: 2019 regulations against unfair business practices
- Amazon Investigation: Ongoing probe into third-party data usage
Why IoT Presents Unique Challenges
- Fragile competition: Digital markets can tip toward monopoly rapidly
- Gatekeeper risk: Few players controlling access to IoT ecosystems
- Consumer harm: Reduced choice, innovation stagnation, and privacy concerns
The Path Forward
The Commission will examine:
- Data flows: Collection methods, monetization, and access controls
- Market structures: How IoT products and services interact
- Interoperability: Technical and commercial barriers to cross-platform functionality
Vestager emphasized the need for timely action: “If we don’t intervene early, we risk repeating past mistakes where competition gave way to monopoly.”
This investigation marks another step in the EU’s comprehensive approach to digital market regulation, following previous actions against geoblocking and platform transparency issues. The outcomes could shape future IoT competition rules across the Single Market.
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