National Post (National Edition)
Latest probe shows EU’s reception to data
Circumspection a surprise development
Silicon Valley giants used to snap up smaller tech firms at will, safe in the knowledge that antitrust regulators rarely prevented them from expanding into new industries.
The European Commission showed on Tuesday that those days are gone, opening an in-depth probe into Google’s US$2.1 billion takeover of Fitbit Inc. — an investigation that focuses on the potentially huge value of its trove of customer data.
The EU authority will investigate how Google could bolster its “data advantage” in online advertising with information it collects from Fitbit fitness. The probe, which has an initial Dec. 9 deadline, raises the risk of a potential veto.
The commission “seems to be finally seizing a unique opportunity to stand up to digital dominance that seeks to exploit our most intimate data for profit,” said Ioannis Kouvakas of Privacy International, which lobbied for a longer EU probe. The deal would strengthen Google’s access to health data “at what might be a critical point for the development of this increasingly important market.”
Regulators are increasingly suspicious of tech giants’ takeovers, aiming to prevent the already powerful firms from conquering innovative new markets where data is often the most prized asset. Antitrust authorities have been criticized for waving through deals such as Facebook Inc.’s takeover of Instagram and even Google’s 2007 bid for display advertising platform DoubleClick.
The EU’s wide focus on online ads clashes with Google’s view that the “deal is about devices, not data” and that it’s adding a service — wearable health devices — where it currently isn’t active and faces plenty of rivals from Apple Inc., Samsung Electronics Co. Ltd., Garmin Ltd. and others.
Google sought to avoid an extended EU review by promising to create a socalled data silo to keep some Fitbit data separate from other Google data sets that built profiles of internet users to serve them ads they might find attractive. EU regulators said they rejected the offer because it didn’t address their concerns and didn’t include all Fitbit data that could be used for advertising.
The commission “is getting wise to big tech’s platitudes,” said Johnny Ryan, a senior fellow at the Irish Council for Civil Liberties, who helped web browser Brave to file privacy complaints over Google’s data collection and advertising practices.
“Google may have given assurances to silo the data it acquires from Fitbit, but previous assurances have been of little value. After Google’s acquisition of DoubleClick, a huge online advertising firm, in 2007 it promised to never combine DoubleClick data with its own. But in January 2016 it did precisely this,” Ryan said.
Ad sales, which make up the bulk of sales at Google’s parent Alphabet Inc., were US$29.9 billion in the second quarter, down 8.1 per cent from the same period last year. It was the first-ever decline in the company’s two-decade history as the coronavirus pandemic and ensuing economic fallout forced advertisers to pull back spending.
The EU says Google is dominant in online search advertising in most of Europe and holds a strong market position for online display ads in 20 European countries. It will also examine ad tech services, how the deal will affect digital health care and whether Google could make it harder for rivals to make devices that work well with its Android mobile phone software.
Health data from Fitbit trackers “provides key insights about the life and the health situation of the users of these devices,” said Margrethe Vestager, the EU’s antitrust commissioner, a keen runner who used to wear a plastic health tracker bracelet made by another company.
“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,” she said in an emailed statement.
Google said it won’t use Fitbit health data for Google ads and will give Fitbit users the choice to review, move or delete their data. The company will also “support wide connectivity and interoperability” of Google products with others.
EU regulators started a sweeping inquiry into devices made by Google and others that collect consumer data last month. Vestager mentioned wearable devices such as Fitbit as one of the many data-collecting products that officials will scrutinize.
Tougher examination isn’t always justified. Amazon. com Inc. finally won U.K. antitrust approval to take a stake in a food-delivery company on Thursday after regulators did a U-turn. Apple’s acquisition of music-identification service Shazam got a long EU probe two years ago that failed to identify antitrust problems.