Google announced late last year that it planned to purchase Fitbit to bolster its wearable portfolio, but the deal has been under scrutiny from the EU since day one. Several months later, it’s now looking like Google’s Fitbit deal will undergo a full investigation from the European Union.
Reuters reports that the EU will announce a full-scale investigation into the Google/Fitbit deal next week. If that’s the case, it could delay the deal from finalizing even further, preventing Google and Fitbit from working together more closely.
Update 8/4: As that recent report mentioned, the EU has today announced that it will launch a full investigation into Google’s Fitbit deal. Starting today, the commission has 90 days to conduct and conclude its investigation, pushing the deal’s closing to at least December of this year, assuming the EU allows it to pass.
As many previous reports have detailed, the EU is worried over Google having access to the health data from Fitbit users as the company could use that data to improve its ad business. Google has promised this won’t be the case, but those promises have not won over regulatory authorities. In the same press release, the EU voices concern that Google’s promises did not cover all of the data provided by the Fitbit acquisition, as well as the potential this Fitbit acquisition has to affect other fitness trackers connected to Android.
The Commission is concerned that the proposed transaction would further entrench Google’s market position in the online advertising markets by increasing the already vast amount of data that Google could use for personalization of the ads it serves and displays.
Executive Vice-President Margrethe Vestager, 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.”
Update 9/23: About a month into the investigation, the probe is being extended by about a month. Previously supposed to close on December 9th, the final decision deadline has been extended to December 23rd (via TechCrunch). No explanation was given on the extension.
Update 10/16: Despite a report that the deal would be approved with Google’s latest concessions, the EU has once again delayed the deadline to January 8th as Reuters reports.
EU antitrust regulators have extended their investigation into Alphabet GOOGL.O unit Google’s $2.1 billion purchase of Fitbit FIT.N to Jan. 8 from Dec. 23, a filing on the European Commission website showed on Friday.
The original article follows.
The investigation would reportedly take up to four months and may focus in on the use of this data in healthcare. In a statement reiterating its previous comments, a Google spokesperson said that the deal is about the devices, not the data, and how Fitbit will help Google better compete in the wearable space.
The wearables space is crowded, and we believe the combination of Google and Fitbit’s hardware efforts will increase competition in the sector, benefiting consumers and making the next generation of devices better and more affordable.
Previously, Google has pledged to the EU that it will not use Fitbit customer data — which includes some detailed heath data — to serve advertisements. That motion was made to help curb antitrust concerns from the EU, but clearly it wasn’t enough now that talks of a full investigation are on the table.
More on Google/Fitbit:
- Europe wants Google to pledge that Fitbit data won’t ‘further enhance’ Search
- Google says Fitbit deal is ‘about devices, not data’ after committing to EU pledge
- Android phones can now recognize a nearby Fitbit device that needs to be set up
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