Consumers have been slow to smarten up their homes, and tech firms may be hoping that their new-ish interoperability standard will accelerate adoption. âSmartâ home technology lets people digitally animate aspects like lighting, blinds, doorbells, vacuums and more with digital controls and sometimes cameras. Even OralB has an âAI-powered toothbrushâ and baby gear is increasingly âsmartâ - like a car seat that lets you know if you forgot your infant somewhere, a bassinet that responds to a babyâs cries, and a video monitor that tracks their breathing. The dystopia of a hyper-connected home was best fictionalised by Cory Doctorow in his novella, âUnauthorized BreadâÂ
Previously, connections across these devices were only facilitated if they were in the same smart [company] family, but now many of these products can âspeakâ to each other due to an industry-led standard that may act to pre-empt or avoid a clumsy policy intervention called âMatterâ (formerly âProject Connected Homeâ). Its creation was led by Amazon, Apple, Google and Zigbee, and some have speculated that the standard is intended to facilitate more adoption of smart home technology by facilitating connectivity, while others see it as a way to pre-empt formal policy intervention.Â
With fellow researchers, I proposed this as a case study in a major research paper from last year, where we looked at both consumer IoT ecosystems (connected cars and voice assistants) and commercial IoT ecosystems (data lock-in and proprietary farm equipment). We flagged that firms that manufacture complementary devices or that operate in an adjacent or downstream market related to IoT ecosystems often need access to the data, to technical information, or to the ecosystem itself to function properly. From a competition standpoint, we raised the issue of barrier(s) to entry and concern that by reducing interoperability, dominant firms within the ecosystem can create and exert greater control in related markets and within the ecosystem.Â
Dominant firms may be incentivised to reduce interoperability to prevent potential competitors from entering the ecosystem. Related, dominant firms may also want to reduce the number of firms in the ecosystem to prevent them from accessing data from the network since this data could provide a competitive advantage within the ecosystem. Thus, reduced interoperability could be an exclusionary strategy for protecting or creating data dominance.Â
We also pointed to a possible intervention outside of the Competition Act - mandating meaningful API access.Â
Lately Iâve been chewing on it, and wonder if a lack of interoperability is actually a mechanism that facilitates competition because everyone is competing vigorously in their own (sort of silly?) vertical.Â
But maybe we donât need interoperability in the IOT (homes) space for that to actually happen. Insisting on the virtues of interoperability - seems to be a way to counter techâs popular push to immediately monopolise new marketplaces and maintain more choice for consumers. Really, an industry-created standard is a weak supplement for policy intervention in the space because it ultimately results in more data for the largest tech firms seeking to dominate, which means it has not eliminated the pathway to monopoly
Perhaps the unrealized ambition of connected devices through the Internet of Things is not unlike the hype that has propelled Web3 or metaverses in and outside of our imagination. It is technically possible to âconnectâ devices in our home and have them âspeakâ to each other - which is certainly novel. But no one has ever really articulated what problem this technological novelty is solving for beyond gesturing atâŚconvenience. I donât think this pseudo-standard solves the competition problem(s) with IoT in the home. Reducing privately-led interoperability would do more to restore competition. Â
This week I talked a lot about TikTok. I think we can and should do more to articulate and clarify the concerns that the government is attempting to raise. As usual the toughest interview was with CBC Kids b/c itâs just a good exercise to try to make public policy relevant for that audience.
NB. âregs to richesâ got a shout out in the Report on Business magazine, where we were recognized alongside other challengers for tackling tough policy questions and even having a little bit of FUN.
I think the problem youâve spotted is a consequence of a few firms being dominant in IOT markets. Amazon/Google want to set the interoperability rules because it gives them control of the industry, not because itâs necessary to make the IOT devices work. They can do this because they can pour all sort of resources into maintaining their dominance.
Industry-led interoperability is not bad per se. There are lots of examples of industry standards opening up more competition. But the context in which those standards are set is important. Is the standard âeveryone gets to control their devices as they see fit using these open toolsâ, or is it âyou must give all your data to Googleâ?