Sonos Needs Regulatory Protections For Competitive Concerns, Not a Blockade of Consumer ProductsJanuary 23, 2020
Yesterday, Public Knowledge and the R Street Institute filed a comment at the International Trade Commission, arguing that it should deny Sonos’s request that categories of consumer products be blocked from import. On the merits, Public Knowledge finds Sonos’s ITC request runs contrary to the public interest. However, this is not an indictment against Sonos’s legitimate competition concerns. These competitive concerns demand resolution if consumers are to benefit from real, interoperable choices in the growing Internet of Things marketplace.
The following can be attributed to John Bergmayer, Legal Director at Public Knowledge:
“Sonos has put forward a compelling story about how difficult it can be for independent technology companies to compete in areas that dominant platforms have decided to enter. An innovator in smart speakers, Sonos is outsold and outgunned by the large technology companies who see this market as an area of growth. In order to integrate with music services and smart assistants from these companies, Sonos has to collaborate with them. Sonos has alleged in particular that Google has abused that relationship, and ultimately that it has infringed Sonos’s patents.
“However, Sonos has had to resort to a legal tool that will harm the public interest. Its request to the ITC, asking it to exclude from the United States a wide range of products (not just smart speakers) it alleges infringe its patents, would harm consumers and could have broader effects on competition. While that request should be denied, Sonos can pursue its claims in another forum, and policymakers need to step up and address the growing anti-competitive concerns of dominant digital platforms.
“Patent law is often not the right tool to address claims of anticompetitive behavior by dominant platforms. In general, patent law can be a poor tool to protect innovation due to overly general, obvious, and iterative patents that can produce licensing and attorney fees but do little to advance innovation. By design, patent law limits competition, does not merely target ‘copying,’ and can be used by large companies who acquire vast numbers of patents against potential new market entrants. An import blockade based on alleged infringement, before there has even been a trial on the merits, is too blunt a tool, and sets a dangerous precedent that could end up harming small innovators and protecting dominant firms in the future.
“Nondiscrimination and interoperability rules would better address the situation that Sonos and companies like it find themselves in. Third-party hardware products should be able to integrate with Google services on equal terms as Google’s hardware products, and Google should not limit third parties from implementing useful features, such as speakers that also integrate with other smart assistants.
“We must address the underlying problem of dominant digital platforms’ power in the marketplace with systemic, fundamental changes to the way this industry functions. To achieve this, Public Knowledge continues to call on policymakers to create an expert agency to regulate dominant digital platforms and the specific anticompetitive harms they create. Until we do, we may continue to see workarounds like this one that don’t serve consumers or the industry well.”
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