The European Commission will conduct a full investigation into Google’s acquisition of Fitbit.
The announcement has undergone preliminary review and may derail the acquisition of this fitness tracking company.
Although Google made a proposal last month not to use Fitbit̵
Google’s parent company Alphabet agreed last year to acquire the wearable technology company for $2.1 billion (£1.6 billion). However, this transaction has not yet been completed.
The regulator said: “The committee is concerned that the proposed transaction will further strengthen Google’s market position in the online advertising market by increasing the data Google can use to personalize the ads it puts and displays.”
Watchdog said its investigation should be completed before December 9.
In response, the technology giant said it would cooperate with this process.
Rick Osterloh, head of Google devices, wrote: “We are very pleased to have the opportunity to work with the European Commission to address consumer expectations for wearable devices.”
California-based Fitbit helped to open up the fitness tracker market, launching its first device in 2009. The device currently has about 30 million active users, and more than 100 million gadgets have been sold to date.
However, according to market research company IDC, it is currently second only to Apple, Xiaomi, Samsung and Huawei in terms of global wearable technology shipments.
Despite the release of the Versa 2 smartwatch, its performance last year lost 132 million U.S. dollars (101 million pounds), while sales figures fell for the fourth consecutive year.
Analysts believe that in addition to the government health plan implemented in Singapore, Fitbit has also established partnerships with a number of insurance companies, which is quite attractive to Google.
The European Commission has stated that its main focus is “data advantage” and Google will provide increasingly personalized ads through its search page, but it also stated that its investigation will target the following:
- The impact of the merger on the nascent digital healthcare industry in Europe
- Does Google have the ability and ability to make it more difficult for competitors’ wearable devices to use its Android operating system?
Google explicitly denies that its motivation is to control more data.
Mr. Osterloh said: “We believe that the combination of the hardware work of Google and Fitbit will enhance competition in this field and make the next generation of devices better and more affordable.”
“This transaction is about equipment, not data.
“From the beginning we knew clearly that we would not use Fitbit’s health data in Google ads.”
The European Commission acknowledged this commitment, but stated that it was “not enough to clearly address” its concerns.
It added: “The data island remedy does not cover all the data that will be accessed after the Google transaction.”
A digital rights activist welcomes intervention.
Wolfie Christl of Cracked Labs, an Austrian research institute, said: “Google and its parent company Alphabet have exercised unprecedented control over most of the digital world.”
“They also want to take over digital health and insurance.
“Getting them to acquire Fitbit without additional obligations will be an important step in this direction, so it shouldn’t happen.”
The European Commission has reason to be vigilant about Google’s promise to restrict its use of Fitbit data.
Smart thermostat manufacturer Nest promised to separate its user data from Google after acquiring Google in 2014. But Google began to require users to merge their logs in 2019.
Other technology companies have given up similar guarantees.
Most notably, even though the chat application announced in 2014 that it would “remain autonomous and run independently,” Facebook is still working to integrate WhatsApp with other messaging services.
The European Commission has ruled against Google in three previous competition cases, involving the company’s following cases:
The regulator is also considering whether to conduct a full investigation of the company’s job search tools.
Google is also facing increasing antitrust censorship in the United States.
The company’s chief executive, Sundar Pichai, faced several charges of anti-competitive conduct when questioned by Congress last week, including claims that Google has too much control over the purchase and sale of online advertising.
In addition, the Senate Judiciary Committee said it plans to hold a hearing on Google’s “dominance of online advertising” on September 15.