TOPLINE
The European Union has launched a full-scale antitrust investigation into Google’s $2.1 billion deal to acquire wearables maker Fitbit, expressing concerns that it would further consolidate Google’s dominance in the online advertising space by giving the search engine giant access to personal data collected from Fitbit’s health tracking devices.
KEY FACTS
The European Commission said in a press release that it will investigate how data collected from Fitbit’s fitness trackers will increase Google’s “data advantage” in the personalization of online ads in a manner that would disadvantage its rivals.
The regulator will also investigate the deal’s effect on the digital healthcare sector in the region, specifically examining if Google could make it harder for other wearables makers to integrate their products with Android-based mobile phones.
The officials have set an initial December 9 deadline to approve or veto the deal.Responding to news of the probe Google said in a blog post that the “deal is about devices, not data,” adding that there is “vibrant competition” in the smartwatches and fitness tracker space.
The U.S. tech giant has said that it won’t use health data from Fitbit devices for Google ads and will allow Fitbit users the choice to review, move or delete their personal data.
Regulators around the world, including the FTC, have increasingly begun scrutinizing acquisitions of smaller competitors by big tech companies.
Crucial Quote
“The use of wearable devices by European consumers is expected to grow significantly in the coming years. This will go hand in hand with an exponential growth of data generated through these devices. This data provides key insights about the life and the health situation of the users of these devices,” Margrethe Vestager, the EU’s antitrust commissioner said in the press release. “Our investigation aims to ensure that control by Google over data collected through wearable devices as a result of the transaction does not distort competition.”
Key Background
Since the announcement of Google’s plan to acquire Fitbit in November 2019, following which the deal has been facing scrutiny from various government agencies including the U.S. Justice Department and the Australian Competition and Consumer Commission (ACCC). In June, the Australian regulator had raised concerns that the deal would allow Google to further cement its position and raising barriers to entry for potential rivals. Apart from probing the acquisition, the U.S. Justice Department is also investigating charges that Google is engaging in anti-competitive behavior.
Further Reading
Google’s $2.1 Billion Fitbit Deal Faces Troubles in Europe, Australia (Wall Street Journal)
Justice Department Will Reportedly Review Google’s $2.1 Billion Fitbit Acquisition (Forbes)
