Google’s deal for Fit­bit faces full EU re­view

The Daily Telegraph - Business - - Technology Intelligen­ce - By James Cook

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.”

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