Google’s Fitbit Deal Needs Deep Scrutiny
A coalition of 20 organizations from the US, Europe, Latin America, and elsewhere raised their concerns over Google Inc.’s takeover of health tracker company Fitbit Inc. on Thursday in a statement sent to antitrust authorities in seven jurisdictions, including the US and the European Union (EU).
The privacy and consumer groups said global regulators need to closely investigate the search giant’s $2.1 billion bid for Fitbit. This is because the deal would potentially strengthen its already-dominant position in the digital markets.
Google’s Fitbit Acquisition Threatens to Undermine Other Rivals
Google’s acquisition plan raised antitrust and privacy concerns as soon as they announced it in November.
The issue came while it faced antitrust scrutiny under the US Justice Department, a congressional committee, and several states for allegedly using its substantial market power to undermine smaller rivals.
A spokeswoman for Google said the space for wearable technology was crowded, and the deal is about devices, not data. They believe the merging of the two companies’ hardware efforts will fuel the competition in the sector. This should benefit consumers and making next-gen devices better and more affordable.
The search giant made the proposal to contend with competitors in the crowded market for fitness trackers and smartwatches. Fitbit’s market share has felt the pressure of tech giants such as Apple Inc. and Samsung Electronics Co. Ltd.
The groups stated that past experience shows that regulators must be very wary of any promises merging parties make about restricting the use of the acquisition target’s data.
Regulators must assume that Google will, in practice, utilize the entirety of Fitbit’s currently independent, unique, highly sensitive data set in combination with its own, the groups added.
The consumer groups warned that Google’s takeover of Fitbit, which has about 30 million users, could allow it to extend its existing power in digital markets to health care and possibly weaken new competition.
The deal will also potentially provide the search giant more profiling data to strengthen its search engine and advertising businesses.
EU antitrust regulators have until July 20 to decide whether they should clear the $2.1 billion agreement with or without concessions or extend the investigation.
EU regulators have sent out questionnaires
The questionnaires ask the search giant and Fitbit’s rivals whether the merger will disrupt competition. Either that or if putting other fitness tracking apps in the Play Store would put others at a disadvantage.
The questionnaires also asked rivals to weigh the impact of the deal on Google’s growing digital healthcare business.
Australia’s competition authority had also expressed concerns over the company’s access to health data. It said it would make a final verdict next month.
