The European Commission has launched an in-depth probe into Google’s takeover of Fitbit, it said in a statement on August 4. The Commission said it was concerned that the proposed transaction will further entrench Google’s market position in the online advertising markets by increasing the already vast amount of data that it uses for personalisation of the ads it serves and displays.
Google had announced the acquisition of wearables company FitBit for $2.1 billion in November 2019, to help invest further in Wear OS and introduce Made by Google wearables into the market. The transaction was notified to the Commission on 15 June 2020. The watchdog said its investigation should be completed by 9 December.
The Commission’s major concerns
Google had informed the Commission on July 13, that it will create a data silo to separately store data collected from wearables. It also committed that Google will not use that data for advertising. However, the Commission said that the data silo commitment proposed by Google is insufficient to clearly dismiss doubts about the effects of the transaction. It added that the data silo remedy did not cover all the data that Google would access as a result of the transaction and would be valuable for advertising purposes.
The Commission is also of the opinion that by acquiring Fitbit, Google would acquire the database maintained by Fitbit about its users’ health and fitness, and also the technology to develop a database similar to Fitbit’s.
In addition, the Commission will examine:
- The effects of the combination of Fitbit’s and Google’s databases and capabilities in the digital healthcare sector, which is still at a nascent stage in Europe
- Whether Google would have the ability and incentive to degrade the interoperability of rivals’ wearables with Google’s Android operating system for smartphones once it owns Fitbit.
What Google said: “This deal is about devices, not data,” said Rick Osterloh, senior VP for devices and services at Google. “We’ve been clear from the beginning that we will not use Fitbit health and wellness data for Google ads. We recently offered to make a legally binding commitment to the European Commission regarding our use of Fitbit data. As we do with all our products, we will give Fitbit users the choice to review, move or delete their data. And we’ll continue to support wide connectivity and interoperability across our and other companies’ products,” he added.
In Europe: Before this, the European Data Protection Commission had raised privacy concerns around the acquisition, saying that “the combination and accumulation of sensitive personal data regarding people in Europe by a major tech company could entail a high level of risk to privacy and data protection”.
Privacy and antitrust concerns around the acquisition were raised in the US: A coalition of privacy, consumer and social justice groups had, in November 2019, asked the United States government to block the acquisition, citing antitrust and privacy concerns. Fitbit would help Google to increase its dominance over internet searches, and give it another way to gather health information, the coalition had said.