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Google acquires Fitbit despite antitrust probes in US, Australia

fitness wearable

Google has closed its deal to acquire fitness wearables company Fitbit, even as probes by competition regulators in the United States and Australia are yet to conclude. The Alphabet-owned company has stressed that “the deal has always been about devices, not data”. The announcement comes nearly a month after the European Union (EU) approved the deal, subjecting Google to certain restrictions such as keeping Fitbit data siloed from Google’s ad business.

We worked with global regulators on an approach which safeguards consumers’ privacy expectations, including a series of binding commitments that confirm Fitbit users’ health and wellness data won’t be used for Google ads and this data will be separated from other Google ads data. — Rick Osterloh, Senior Vice President, Devices & Services, Google 

Osterloh also went into detail about how it will keep access to Application Programme Interfaces (APIs). The Alphabet-owned technology giant’s “commitments” are the result of a months-long investigation by the European Commission into the acquisition’s anti-competition concerns. Fitbit has 25 million active users, and has sold over 120 million devices to date.

Europe squeezes out commitments from Google on data silos, access to Android tools

In December, the European Commission, the RU’s executive arm, gave its nod to the deal, subject to multiple conditions imposed on Google. The Commission’s probe, launched in August 2020, focused on the data collected via Fitbit’s wearable devices and their interoperability with Google’s Android Operating System for smartphones. It was concerned that Google would harm competition in the EU raising barriers to entry and making it harder for existing players to match up to Google and Fitbit’s combined abilities.

For instance, since Google would acquire Fitbit’s database, it could use it for ad personalization, making it harder for rivals to march’s Google in search and display ads and the entire “ad tech” ecosystem. Further, since several healthcare apps access Fitbit data via APIs, Google could restrict rivals’ access to the API which could  possibly harm European startups.

The Commission’s binding commitments, for a minimum of 10 years, on Google include:

  • Data commitments: Google will not use the health and wellness data gathered from Fitbit devices in the European Economic Area for Google ads, including for search and display advertising, or for ‘advertising intermediation’ products, which is data collected via sensors and manually inserted data. To this effect, Fitbit user data will be stored in silos and will be separate from any other Google data used for ads.
  • User choice to deny use of their data: Users in the European Economic Area will have an “effective choice” to grant or deny the use of their data stored in their Google or Fitbit account or other Google services such as Search, Maps, Assistant, and YouTube.
    Google will maintain access to users’ health and fitness data to software applications through the Fitbit Web API, without charging for access and subject to user consent.
  • Continued access to Android tools and APIs: Google will continue to license core public APIs for free to Android original equipment manufacturers (OEMs). The core APIs will include those that enable Bluetooth connections to Android phones, or ability to access a phone’s camera and Global Positioning System. OEMs will also be able to access future functionalities, Google will grant them access to all the Android APIs that it will give to Android smartphone developers including those that are part of Google Mobile Services.

The conditions will apply for 10 years to begin with, extendable by another 10 years, and will be monitored by an independent trustee, the Commission had said. The trustee will have access to Google’s records, personnel, facilities or technical information.

Osterloh repeated Google’s commitments to explain that the deal had finally gone through:

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We’ll also maintain access to Android APIs that enable devices like fitness trackers and smart watches to interoperate with Android smartphones, and we’ll continue to allow Fitbit users to choose to connect to third-party services so you’ll still be able to sync your favorite health and fitness apps to your Fitbit account. These commitments will be implemented globally so that all consumers can benefit from them. We’ll also continue to work with regulators around the world so that they can be assured that we are living up to these commitments. — Rick Osterloh, Senior Vice President, Devices & Services, Google
[emphasis ours]

Fitbit CEO and co-founder James Park has reiterated almost the same, stating that “trust of our users will continue to be paramount”.

US, Australian competition probes still ongoing

Google says it went ahead with the deal as the investigation period had ended and the US Justice Department (DoJ) had not taken any action to stop it, reported Bloomberg. The company said it complied with the DoJ’s review for the past 14 months and agreed upon the waiting period.

But the Justice Department told Reuters that it “has not reached a final decision about whether to pursue an enforcement action” on the deal. In addition, the Australian Competition and Consumer Commission’s Chair Rod Sims said “depending on the results of our investigation, we will consider whether to take legal action on this matter.” There is a possibility that the Justice Department could sue the companies later on if it determines that there was a violation of merger laws.

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