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Australia’s antitrust watchdog rejects Google’s Fitbit undertaking

The Australian Competition and Consumer Commission (ACCC) said it is delaying its decision on the planned $2.1 billion Google acquisition of Fitbit. The regulator cited competition concerns in a statement yesterday.

While the US Department of Justice is yet to make its decision, the deal had received a conditional approval from the EU last week. The European Union has been conducting a probe on whether to clear acquisition for the past five months.

EU regulators said they had agreed concessions with Google. These are to do with privacy when it comes to using Fitbit data, and a technical separation of Fitbit and Google data. The search giant has also agreed to abide by commitments for a further 10 years related with Fitbit’s Web API and its own Android API.


Australian regulators also have concerns

However, regulators in Australia have also been mulling over the deal. The ACCC fears the acquisition would give the Mountain View company access to too much data. This might have the potential to adversely affect competition in both the health and online advertising markets.

Just like with the EU, Google is looking to address these concerns. The company offered a court enforceable undertaking not to use health data for advertising, and implement measures to alleviate competition concerns.

But the Australian regulator has rejected the behavioural undertaking. In its decision it cites fears that other players in the market that use Google software might be squeezed out.

“The ACCC continues to have concerns that Google’s acquisition of Fitbit may result in Fitbit’s rivals, other than Apple, being squeezed out of the wearables market, as they are reliant on Google’s Android system and other Google services to make their devices work effectively,” ACCC Chair Rod Sims said.

This would effectively make the wearables market a two horse race between Apple and Google. Not an ideal situation.

“The acquisition may result in Google becoming the default provider of wearable operating systems for non-Apple devices and give it the ability to be a gatekeeper for wearables data, similar to the position it holds for smartphones which licence the Android operating system.

The ACCC said it will continue its investigation in the coming months. We shall hear more on March 25, 2021 when the Australian watchdog is due to announce its decision. Google could be liable for a fine of up to $400m if it takes over Fitbit before the Australian regulator concludes its investigation.

“As we’ve said from the beginning, this deal has always been about devices, not data, and we are committed to protecting Fitbit users’ privacy.” said a Google spokesperson expressing disappointment at the decision.

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