How the Internet of Things Limits Consumer Choice

[Commentary] In theory, the Internet of Things -- the connected network of tiny computers inside home appliances, household objects, even clothing -- promises to make your life easier and your work more efficient. Except when the companies that make these connected objects act in a way that runs counter to the consumer’s best interests -- as the technology company Philips did recently with its smart ambient-lighting system, Hue, which consists of a central controller that can remotely communicate with light bulbs. In mid-December, the company pushed out a software update that made the system incompatible with some other manufacturers’ light bulbs, including bulbs that had previously been supported.

The story of the Hue debacle -- the story of a company using copy-protection technology to lock out competitors -- isn’t a new one. Plenty of companies set up proprietary standards to ensure that their customers don't use someone else's products with theirs. To stop competitors just reverse-engineering the proprietary standard and making compatible peripherals (for example, another coffee manufacturer putting Keurig’s codes on their own pods), these companies rely on a 1998 law called the Digital Millennium Copyright Act (DCMA). For the Internet of Things to provide any value, what we need is a world that looks like the automotive industry, where you can go to a store and buy replacement parts made by a wide variety of different manufacturers. Instead, the Internet of Things is on track to become a battleground of competing standards, as companies try to build monopolies by locking each other out.