European Commission to investigate Google’s Fitbit acquisition

An investigation to assess the proposed acquisition of Fitbit by Google has been opened by the European Commission.

Google’s parent company, Alphabet, announced it had acquired the wearables company in November 2019, in a deal worth about £1.6billion ($2.1billion).

However, the European Commission has said it is concerned the “proposed transaction would further entrench Google’s market position in the online advertising markets by increasing the amount of data that Google could use for personalisation of the ads it serves and displays”.

It is hoped the investigation will be completed by 9 December, 2020.

It will look into the effects of the acquisition and whether it will give Google a “data advantage” and allow the tech giant to distribute increasingly personalised ads via its search page.

The European Commission will also examine the effects of the combination of Fitbit’s and Google’s databases and capabilities in the digital healthcare sector and whether Google would have the ability and incentive to degrade the interoperability of rivals’ wearables with Google’s Android operating system for smartphones once it owns Fitbit.

Executive vice-president of the European Commission, Margrethe Vestager, who is responsible for competition policy, said: “The use of wearable devices by European consumers is expected to grow significantly in the coming years. This will go hand in hand with an exponential growth of data generated through these devices.

“This data provides key insights about the life and the health situation of the users of these devices. Our investigation aims to ensure that control by Google over data collected through wearable devices as a result of the transaction does not distort competition.”

Google has denied the deal is about data.

“We believe the combination of Google and Fitbit’s hardware efforts will increase competition in the sector, making the next generation of devices better and more affordable,” Rick Osterloh, senior vice president, devices and services at Google, said in a blog post.

“This deal is about devices, not data. We’ve been clear from the beginning that we will not use Fitbit health and wellness data for Google ads.”

He added: “We appreciate the opportunity to work with the European Commission on an approach that addresses consumers’ expectations of their wearable devices.”