A Competition-Law-Oriented Look at the Application of Data Protection and IP Law to the Internet of Things: Towards a Wider ‘Holistic Approach’

Business models in the digital economy increasingly rely on wireless communications capabilities, which make it possible to receive, collect and send a myriad of user data. As the intensity and magnitude of this technological revolution, widely known as the ‘Internet of Things’ (IoT), are mostly unknown to date, the law may struggle to evolve quickly enough to address the challenges it poses. Many of the legal issues arising from smart devices relate to user privacy and device security. Moreover, it is worth considering how the ownership of data that flow through the IoT and their impact on market power may potentially lead to anti-competitive concerns by creating or reinforcing a dominant market position. After noting the state of the law with regard to these areas, this chapter will focus on the impact of IP rights covering IoT technologies on lock-in strategies aimed at foreclosing interoperability with competitors’ technologies. It will discuss when IP rights could lead to anticompetitive concerns by creating or strengthening a dominant market position and whether the actual set of laws has the antibodies needed to discourage these unfair competition practices. It will be suggested that these issues should be explored at the intersection of data protection, intellectual property, competition law and standard-setting public policy. In this regard, the European Data Protection Supervisor’s ‘holistic approach’, initiated to bring privacy concerns into merger investigations, might have a significantly wider horizon in the IoT context and open up a closer dialogue between regulators.