Antitrust regulators in the European Union (EU) have opened a 4 month probe on whether to clear Google’s $2.1 Fitbit acquisition. The deal has come under increasing scrutiny from regulators due in part to privacy concerns.
Essential reading: Top fitness trackers and health gadgets
The first we’ve heard of the acquisition was late last year. Google agreed to pay $7.35 per share for Fitbit in an all-cash deal.
As is expected with all such transactions, regulatory approval is needed. In the US, the US Department of Justice (DoJ) opened an investigation into whether the transaction should be allowed to go through. This underwent a second request review last April, meaning both companies were asked to provide the DoJ with more information.
But regulators are mulling over the deal across the pond, as well. The acquisition is currently undergoing a a review by the European Commission. A filing on the regulator’s website shows that Google sought its approval in mid-June.
Even though privacy issues are not part of the EU anti-trust review, there are concerns. Fitbit already holds a lot of data on millions of people, as does Google. Access to Fitbit data is likely to be important to the search giant but it is likely it will have to make compromises on how it handles user data. Targeted advertising is not the only concern.
“If Google acquires consumers’ data generated by the use of Fitbit wearables, including now COVID-19 related data, it would be able to use that data for its own benefit and could undermine the ability of other companies to bring new products to consumers,” the BEUC, a European consumer advocacy group, recently warned.
The European Commission has now decided it needs more time to decide whether to clear the deal. It has therefore opened a four month full-scale investigation. Needless to say, this could delays the deal from finalising even further.
“The wearables space is crowded, and we believe the combination of Google and Fitbit’s hardware efforts will increase competition in the sector, benefiting consumers and making the next generation of devices better and more affordable.” said a Google spokesperson.
Google adds that the deal is about devices, not data. And that they are not planning to use health statistics to serve customised advertisements.
If you are worried about your Fitbit data, there are things you can do. For example you can export and delete your data before Google takes over.
Fitbit has, at its second-quarter earnings report yesterday, said that it still expects the deal is expected to go through in the months ahead. But that it may not get all of its regulatory approvals before the end of 2020, so the “time frame may extend beyond that.” Plus there’s the COVID-19 situation which may impact the timing of receipt of these approvals.
The San Francisco wearables manufacturer sold 2.5 million devices in the first half of 2020. This was down nearly 30% last year primarily due to only one new product introduction in the last six months.
Like this article? Subscribe to our monthly newsletter and never miss out!