European Union regulators are investigating possible issues with Google’s takeover of Fitbit. Google announced the takeover at the end of last year. The EU has now sent out questionnaires to Google’s competitors asking if they have any concerns about the takeover. Privacy authorities are also worried about Google’s acquisition. They are concerned that Google will get their hands on too much data.
Google announced its plans to buy Fitbit back in November. At first sight, it seemed to be the perfect fit. Google has struggled getting into the wearables market, and Fitbit has struggled with its growth. Fitbit’s market share has been continuously threatened by companies like Apple and Samsung. The deal that was on the table in November valued Fitbit at $2.1 billion.
Fitbit stated that “Google is an ideal partner to advance our mission. With Google’s resources and global platform, Fitbit will be able to accelerate innovation in the wearables category, scale faster, and make health even more accessible to everyone. I could not be more excited for what lies ahead”.
But after the announcement, concerns were raised immediately. Privacy advocates were worried that with the acquisition, Google would be collecting too much data on its users, since the fitness watches measure a user’s heart rate and activity levels. And health data could be valuable information for a company, if it’s planning to sell that data to third parties.
Google addressed the concerns by stating that the company “will never sell personal information to anyone. Google will not be using Fitbit health and wellness data for Google ads. And we will give Fitbit users the choice to review, move, or delete their data”. The company claimed that they will be transparent about the data it gathers.
The deal has not been finalized yet, because it has not gone through all of the required regulatory approvals. There are concerns that other companies would not be able to compete with Google anymore. Privacy advocates are also worried that Google is trying to extend their data collection for advertising purposes. So these groups are now asking governments around the world to investigate the deal.
“Past experience shows that regulators must be very wary of any promises made by merging parties about restricting the use of the acquisition target’s data,” the groups said. “Regulators must assume that Google will in practice utilize the entirety of Fitbit’s currently independent unique, highly sensitive data set in combination with its own”.
A Google spokesperson responded to this claim, stating to Reuters that “[t]his deal is about devices, not data. We believe the combination of Google’s and Fitbit’s hardware efforts will increase competition in the sector”.
So the European Commission is currently investigating the deal. They hope to have a decision by July 20. They are investigating whether the deal would drive other wearable manufacturers out of the market, if it would give Google an unfair advantage in the advertising world, or if it would give the company access to too much personal information.
Reportedly, EU regulators have sent a 47-page questionnaire to rival companies, with questions like: “In your view, would the aggregation of Fitbit’s data to Google’s database strengthen Google’s position in the supply of online search advertising services?”
And the EU isn’t the only one investigating Google. The company is under antitrust investigation by the US Justice Department as well. The department is looking into whether Google is harming smaller competitors. And Australian authorities hope to have a decision by August in their investigation.