EU Regulators Scrutinize Google’s $2.1B Fitbit Acquisition

Antitrust regulators and consumer advocacy groups have increased scrutiny on Google’s planned acquisition of fitness tracker firm Fitbit.

Google announced it would buy the firm last year for $2.1 billion and hoped to complete the deal in 2020. But it’s possible the acquisition will have delays over fears about the search giant’s increased access to sensitive data.

That is data from Fitbit’s hardware, including users’ heart rates, their fitness activity, and their sleep patterns.

Reports say the EU regulators have sent 60-page questionnaires to Google and Fitbit’s rivals. These were asking them to assess how the acquisition will affect the digital healthcare space.

That includes whether it will disadvantage fitness tracking apps hosted in Google’s Play Store. As well as how Google might use the data to profile users for its search and advertising business.

The EU regulators’ deadline will be on July 20th for their next decision regarding the deal. The trading bloc can choose to approve the deal, or ask for concessions from Google. Regarding how Fitbit’s data is used, for example.

It can also choose to open a four-month investigation to fully explore concerns.

Reports say the level of detail in the recent questionnaires sent to the companies’ rivals suggests an extended investigation.

The EU isn’t the only party feeling anxious about the acquisition. In June, Australia’s Competition and Consumer Commission announced its own concerns.

ACCC Chairman, Rod Sims, said buying the company will allow Google to build an even more comprehensive set of user data. That is further cementing its position and raising barriers to entry to potential rivals.

Google Not to Use Fitbit’s Data for Ads

Concerns from regulators have also been matched by consumer advocacy groups. This week, 20 consumer groups, from the US, EU, Mexico, Canada, and Brazil, wrote to regulators. They were saying the deal was a test case to see if they could effectively reign in data monopolies.

The group said Google could exploit Fitbit’s exceptionally valuable health and location datasets. It could exploit Fitbit’s data collection capabilities to strengthen its already dominant position in digital markets such as online advertising.

Furthermore, Google could also use the company’s data to establish a commanding position in digital and related health markets. That will be depriving competitors of the ability to compete effectively.

Google has made some concessions to allay these fears. It said last year that Fitbit health and wellness data will not be used for Google ads.

In reaction to the letter from consumer groups, the company said the deal is about devices, not data. The wearables space is highly crowded and the acquisition of Fitbit will only increase competition, they added.

This line of argument is likely to deter antitrust regulators from simply blocking the deal. Fitbit and Google aren’t direct competitors. And neither of them holds enough of the wearables market to make the argument that the deal creates a monopoly.

Antitrust attorney, David Balto, was the policy director at the FTC during Microsoft’s antitrust trials. He said it would be extraordinarily difficult to bring forth a case. There are no successful oppositions to vertical mergers like this, said Balto.