Industry Trend Analysis - Tech-Lash Context To Help Arcep's Device/Platform Neutrality Push - APR 2018

BMI View: Arcep will gain traction from its latest device/platform neutrality proposals, even if competition tools already exist against some of the issues it has raised. The current techlash environment, and the overall neutrality framework proposed, means the proposals will have some momentum, especially in Europe.

French regulator Arcep is looking to create a new framework to ensure the Internet remains open end-to-end, adding the principles of device or platform neutrality to the already-regulated principle of net neutrality. Arcep believes the lack of openness of devices, through the use of applications, and its domination by a few major operating systems pose a threat to consumer choice, which must be addressed. We believe the current context of industry backlash against the bigger tech companies will drive momentum for Arcep's proposals, especially in Europe.

The table above highlights Arcep's proposals to improve transparency and consumer choice when it comes to device usage. The first primary targets are smartphones and tablets, and we believe this is where the regulator's argument is the weakest. While it is true that operating systems, including PCs, are dominated by three major companies - Google, Apple, Microsoft - and that usage has moved from web browsing to applications, we do not believe it has significantly harmed consumer choice. Users are still able to use and download the applications of their choice, and the issues raised by Arcep, such as pre-installed apps or their inclusion in a store, are already being investigated by antitrust and competition authorities in multiple markets, with Google having already been found guilty over Android. The tools are already in place.

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