Antitrust and the Internet of Things: Addressing the Market-Tipping Fallacy

When Kevin Ashton, a London-based computer scientist at Procter & Gamble, finished this PowerPoint presentation in 1999 to persuade his managers that his company should put radio frequency identification tags and other sensors on products in the supply chain, he needed a title for his presentation. The title would be “Internet of Things” (IoT), thereby coining a growing and irresistible phenomenon. More than twenty years later, the IoT has become reality. IoT has “smart” possibilities: Smart cities, smart homes, smart factories, smart farms, and more. But while the IoT remains an incipient technology, the artificial intelligence and algorithms embedded in IoT devices have ushered in an array of regulatory concerns. One of these concerns lies in the IoT’s effects on competition, which pares down to the emergence of so-called “gatekeepers.”

In this article, published in Concurrences (2021, no. 3), Aurelien Portuese discusses the fear that the IoT has gatekeepers and will generate more. Market tipping, or the extreme concentration of a market by one or few payers, remains a basic premise for the designation of gatekeepers. This article demonstrates that the notion of market tipping in IoT confuses the first-mover advantage inherent to “market creation.” Absent market tipping, or with considerable qualifications, antitrust authorities should reconsider a hasty analysis concluding that IoT markets epitomize gatekeepers.