Home Web Google EU Regulators Take a Closer Look at Google’s Fitbit Purchase

EU Regulators Take a Closer Look at Google’s Fitbit Purchase

Around a year ago, Google bought Fitbit for slightly more than $2 billion and announced that all details related to the deal would hopefully be tied up this year. However, it seems probable that the acquisition might not proceed in its original form or will at least be delayed. 

The reason relates to widespread concern over the fact that the purchase if allowed to proceed will enable Google to access all manner of sensitive data. This includes the sleep patterns, fitness activity, and even heart rates of users of Fitbit devices.

EU Rolls Out Some Heavy Artillery

In response to the issue, the EU has delivered a comprehensive questionnaire to competitors of the two unlikely suitors- Fitbit and Google. The questionnaire tasks the firms with gauging how they imagined Google would use data gleaned from its Fitbit purchase to execute better-targeted ads, requires identification of the effects of the acquisition on the fitness apps already on Google Play, and the potential influence the deal might have on the digital healthcare space.

Regulators in the EU have also stated that July 20, 2020, marks a deadline when they would decide if the deal should proceed or not. Should the deal be approved, that might be only after concrete concessions are wrung from Google.

The EU can as well opt to open a more intensive investigation related to all aspects of the deal. From most accounts, it seems that it will take this particular step, but that is as of yet unconfirmed.

Resistance Widens

Reports have it that more than a few countries share the current unease over the Google and Fitbit deal. Rod Sims, who functions as the Australian Competition and Consumer Chairman was quoted as saying: “Buying Fitbit will allow Google to build an even more comprehensive set of user data, further cementing its position and raising barriers to entry to potential rivals.”

Not to be left out, around 20 consumer groups from North and South America penned a letter to regulators noting that the Google and Fitbit deal could well be described as a “test case” of sorts for regulators that will determine if they can stop or prevent the creation of data monopolies.

The group was quoted by CNET as noting that: “Google could exploit Fitbit’s exceptionally valuable health and location datasets, and data collection capabilities, to strengthen its already dominant position in digital markets such as online advertising. Google could also use Fitbit’s data to establish a commanding position in digital and related health markets, depriving competitors of the ability to compete effectively.”

Google Hunkers Down

Google has not been sitting on its hands and has been trying to allay concerns. In 2019 it promised that: “Fitbit health and wellness data will not be used for Google ads.” According to the firm, its Fitbit purchase was all “about devices, not data.” It also noted that it foresaw its acquisition spurring competition and innovation in the wearables sector.

It does appear that the search engine giant might be right. For one, Google and Fitbit are in unrelated industries and are thus not direct competitors. Also, neither controls enough of the wearables niche for anyone to successfully argue that the deal is monopolistic. 

Current analysis suggests that Fitbit was responsible for less than 5% of the market in wearables, with Apple recording a substantial 32%. The duo of Xiaomi and Samsung on the other hand had shares of 12% and 9% respectively.

However, Google is much more vulnerable when it comes to charges that allowing it access to the data that Fitbit collects on its users will significantly benefit its online advertising arm. It might have to decide soon if all the negative attention it is getting over this deal is worth it.

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