Antitrust regulators and consumer advocacy groups are increasing their scrutiny of Google’s planned acquisition of fitness tracker firm Fitbit.
Google announced that it was buying Fitbit last year for $ 2.1 billion and said it hoped to complete the deal sometime in 2020. But the acquisition may be delayed for fear of the search giant’s increased access to confidential data from the Fitbit hardware, including users’ heart rates, physical activity, and sleep patterns.
The Financial Times reports that EU regulators have sent 60-page questionnaires to Google and Fitbit’s rivals, asking them to assess how the acquisition will affect the digital healthcare space; if it will harm the fitness tracking applications hosted in the Google Play Store; and how Google could use the data to profile users for its search and advertising business.
EU regulators have set a July 20 deadline for their next decision regarding the deal. The trading bloc may choose to approve the deal, or request concessions from Google (regarding how Fitbit data is used, for example), or open a four-month investigation to fully explore the concerns. the FOOT He says the level of detail in recent questionnaires sent to company rivals suggests that an extended investigation may be underway.
The EU is also not the only party concerned about the acquisition. Last month, the Australian Competition and Consumer Commission announced its own concerns. “The purchase of Fitbit will allow Google to create an even more comprehensive set of user data, further consolidating its position and raising barriers to entry to potential rivals,” said ACCC President Rod Sims.
Regulatory concern has also been equaled by consumer advocacy groups. This week, 20 consumer groups, from the US, EU, Mexico, Canada and Brazil, wrote to regulators saying the deal was a “test case” to see if they could effectively reign in data monopolies.
“Google could exploit Fitbit’s exceptionally valuable health and location data sets, and data collection capabilities, to strengthen its already dominant position in digital markets such as online advertising,” the group said, according to a report by CNET. “Google could also use Fitbit data to establish a dominant position in the digital and related healthcare markets, depriving competitors of the ability to compete effectively.”
Google has made some concessions to allay these fears, saying last year that “Fitbit’s health and wellness data will not be used for Google ads.” In response to the letter from consumer groups, the company said the deal is “about devices, not data,” adding that the wearable space is “very crowded” and that the acquisition of Fitbit will only increase competition.
This line of argument is likely to deter antitrust regulators from simply blocking the deal, it reports. FortuneAs Fitbit and Google are not direct competitors, neither of them has enough wearable market to argue that the deal creates a monopoly.
“It would be extremely difficult to present a case,” said antitrust attorney David Balto, the FTC’s chief policy officer during Microsoft’s antitrust lawsuits. Fortune. “There are no successful oppositions to vertical mergers like this.”
According to IDC analyst data, Fitbit had less than 5 percent of the wearables market in 2019, while Apple, the largest player, had 32 percent. The next two largest companies, Xiaomi and Samsung, have a market share of 12% and 9% respectively. Neither of these companies uses Google software on their portable devices.
However, concerns about data access could be more persuasive given Google’s strong position in online advertising, where it controls 90 percent of the market for some specific tools, such as those used by publishers to sell. graphic ads. This is a sensitive area for Google at the moment, as the US Department of Justice is nearing the end of its own antitrust investigation against the company regarding the alleged abuse of its advertising domain.
