Google set out to acquire the fitness company Fitbit in November last year, but the deal has yet to go through all the required regulatory approvals. There have been concerns that the acquisition could lead to less competition and Google extending its data collection apparatus for targeted ads, and now advocacy groups around the world are urging governments to closely investigate the deal.
A total of 20 advocacy groups based in Europe, the United States, Latin America and other regions signed a joint statement urging government regulators to be careful about Google’s acquisition of Fitbit. The group included Public Citizen in the US, Access Now in Europe, Privacy International, the Brazilian Institute for Consumer Defense.
“Past experience shows that regulators should be wary of any promises made by the merged parties to restrict the use of the acquisition target data,” the groups said. “Regulators must assume that Google will in practice use the entire highly sensitive, unique and currently independent Fitbit dataset in combination with their own.”
Google says the deal is about devices, not data.
In a statement provided to Reuters, a Google spokesperson said: “This deal is about devices, not data. We believe that the combination of Google and Fitbit’s hardware efforts will increase competition in the sector.”
Meanwhile, regulators in Europe are investigating whether the deal would drive other manufacturers of portable devices from the market or increase Google’s dominance in online advertising and search. EU regulators reportedly sent a 47-page questionnaire to rival companies, with questions like “In your opinion, would the aggregation of Fitbit data to Google’s database strengthen Google’s position in supply of online advertising services? “
The European Commission is expected to decide on the agreement before July 20. Australia’s antitrust regulator warned against the deal, but won’t issue a final judgment until August.
Consumer and citizen groups have major concerns that Google’s proposed acquisition of wearable maker Fitbit would be a game changer not only because of the way people interact with the online world, but also because of digital health markets. and related. Therefore, regulators around the world, particularly those related to antitrust compliance and data privacy, should pay their utmost attention. This will be a test case of how regulators are addressing the immense power that tech giants wield over the digital economy and their ability to expand their ecosystems out of control.
More specifically, this merger is a test of the resolve of regulators to analyze the effects on competition of a technology giant that acquires a large amount of very valuable data through an acquisition. 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. Google could also use Fitbit’s data to establish a dominant position in the digital and related healthcare markets, depriving competitors of the ability to compete effectively. This would reduce consumer welfare (including degrading data privacy options), limit innovation, and increase prices.
Past experience shows that regulators should be wary of any promises made by the merged parties to restrict the use of the acquisition target data. Regulators must assume that Google will in practice use the entire highly sensitive, unique and independent Fitbit dataset currently in combination with their own, particularly as this could increase their profits, or they must impose strict and enforceable limitations on the use of data.
Portable devices could replace smartphones as the primary gateway to the Internet, just as smartphones replaced personal computers. Google’s expansion in this market, outperforming other competitors, would be significant. Portable devices like Fitbit could in the future give companies details of essentially everything consumers do 24 hours a day, 7 days a week, and allow them to send digital services to consumers. The way that wearables are used to track COVID-19 infections and give access to doctors and health information is a timely illustration of this. Although, perhaps justified, subject to strong safeguards, in a public health emergency, the exploitation of such data in a commercial context is a major concern that requires careful scrutiny by regulators, both for its anti-competitive effects (where Large packages make it nearly impossible for participants to compete against the headlines) and anti-consumer effects (creating increasingly larger packages that undermine consumer choice).
The Fitbit acquisition could expand Google’s immense power in digital markets to the $ 8.7 trillion global healthcare market1 through its strength in data and data analysis. Google has already made significant strides in healthcare. Regulators must carefully assess the implications of the proposed agreement for innovation and its potential to undermine companies’ ability to bring new products to consumers in the area of digital healthcare.
The results of unfortunate merger control decisions in the past have likely contributed to the rise of tech giants. Subsequent concerns must now be addressed through more expensive and lengthy antitrust enforcement procedures and other competition interventions. Such harm to consumers is much better prevented than cured. Therefore, before deciding whether or not this acquisition can continue, regulators should carefully analyze its implications for consumers and consider its potential for far-reaching and dynamic effects on the digital and healthcare markets.
