Google’s deal for Fitbit faces full EU review
THE European Commission will carry out a full competition inquiry into Google’s $2.1bn (£1.6bn) acquisition of wearable technology business Fitbit.
The action, which follows an initial investigation into the deal, will examine whether the purchase of Fitbit will hand Google potentially valuable data that it could use to dominate the online advertising market.
Giving Google access to Fitbit’s data on its customers, who use the company’s watches and other wearable devices to measure their exercise, risks “increasing the data advantage of Google in the personalisation of the ads it serves via its search engine and displays on other internet pages”, the EU said. The inquiry will also investigate the potential impact of the purchase of Fitbit on the digital healthcare field, as well as any effects on rival fitness wearable devices.
Rick Osterloh, a Google senior vice president who runs the company’s hardware division, wrote in a blog post responding to the announcement that “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,” Mr Osterloh wrote. “We recently offered to make a legally binding commitment to the European Commission regarding our use of Fitbit data.”
The investigation follows a significant blow to the commission last month when Apple won a court victory in its attempt to overturn an EU demand for it to repay €13bn (£11.7bn) in alleged state aid to Ireland. The EU’s general court said it was wrong for the commission to declare tax rulings had been granted for “selective economic advantage and, by extension, state aid”.
Margrethe Vestager, the commission’s executive vice president 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.”