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According to EU results, voice AIs give rise to competition concerns

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The European Union has been looking into the effects of AI-powered voice assistants and other Internet of Things (IoT) -related technologies on competition for almost a year. A first report was released today, discussing potential concerns that EU lawmakers say will help shape their broader digital policies in the years to come.

An important part of the EU legislation, which was introduced at the end of last year, already provides for ex-ante rules to be applied to so-called “gatekeeper” platforms operating in the region, with a list of “dos and don’ts” for business practices for powerful, intermediary platforms that will be integrated into the upcoming EU-wide digital services law.

But if, of course, applications of technology do not stand still. Block’s competition boss Margrethe Vestager has also been keeping an eye on AI technologies for voice assistants for some time – and raised concerns about the challenges facing user selection as early as 2019 when she said her department was “trying to find out how “access to data will transform the marketplace”.

The Commission took a concrete step last July when it announced a sector inquiry to investigate in detail the competition concerns of the IoT.

It has now released a preliminary report based on a survey of more than 200 companies operating in the consumer IoT products and services markets (in Europe, Asia and the US) – and is asking for further feedback the results (by September 1st) due before a final report in the first half of next year.

Key areas of potential competition concerns include: exclusivity and engagement practices related to voice assistants, as well as practices that limit the ability to use different voice assistants on the same smart device; the intermediary role of voice assistants and mobile operating systems between users and the broader market for devices and services – allowing the platform’s voice AI owners to control user relationships, potentially affecting the discoverability and visibility of competing IoT services.

Another problem is (unequal) access to data. Survey respondents suggested that platform operators and voice assistants gain full access to user data – including the collection of information about user interactions with third-party smart devices and consumer IoT services as a result of the intermediary voice AI.

“Respondents to the sector inquiry believe that this access to, and the accumulation of, large amounts of data would not only give voice assistant providers advantages in terms of improving and market position of their universal voice assistants, but would also enable them to leverage more easily in adjacent markets “, Writes the Commission in a press release.

A similar concern underlies an ongoing EU antitrust investigation into Amazon’s use of third-party data that Amazon receives through its e-commerce marketplace (which the Commission believes is illegal to compete in online retail markets could distort).

Lack of interoperability in the consumer IoT sector is another problem highlighted in the report. “In particular, a few providers of voice assistants and operating systems should unilaterally control interoperability and integration processes and be able to restrict the functionalities of smart devices and consumer IoT services from third-party providers compared to their own,” it says.

There’s nothing very surprising about the list above. It is noteworthy, however, that the Commission is trying to get a grip on competition risks – and consider possible remedial action – at a time when the adoption of voice assistant AIs in the region is still at a relatively early stage.

In its press release, the Commission notes that the use of voice assistants is increasing worldwide and is expected to double between 2020 and 2024 (from 4.2 billion voice assistants, per Eurostat data cited.

EU lawmakers have certainly learned lessons from the recent failure of competition policy to keep pace with digital developments and contain a first wave of tech giants. And of course these giants continue to dominate the market for voice AIs (Amazon with Alexa, Google with its assistant of the same name and Apple’s Siri). The risks to competition are therefore crystal clear – and the Commission will be careful not to repeat the mistakes of the past.

However, it remains to be seen how policymakers might look to tackle the lock-in for language AIs, whose USP is usually their lazy web, push-button and brand-user friendliness.

An option to enforce interoperability could add complexity in ways that negatively affect usability – and raise other concerns, such as: B. in relation to the privacy of user data.

Although it can certainly be a good idea to give the users themselves more say and control over how the consumer technology they own works, at least provided that the presentation of the choices on the platform itself isn’t manipulative and exploitative.

There are certainly many pitfalls with regard to IoT and competition – but also potential opportunities for startups and smaller players if proactive regulatory measures ensure that dominant platforms do not set all the requirements again.

Vestager commented in a statement: “When we launched this sector inquiry, we were concerned that there was a risk of gatekeepers appearing in this sector. We feared that they might use their power to harm competition to the detriment of developing businesses and consumers. The first results released today show that many in the industry share our concerns. And in order to use the great potential of the Internet of Things for consumers in everyday life, fair competition is required. This analysis will feed into our future enforcement and regulatory actions, so we look forward to receiving further feedback from all interested stakeholders in the coming months. “

The full sector report can be found here.

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Melinda Martin