EU Regulators Take a Closer Scrutinizing Look at $2.1 billion Google-Fitbit Deal

by Pooja Deshpande on

The consumer advocacy groups and antitrust regulators increase their scrutiny on Google’s planned acquisition of Fitbit. Last year, Google announced that it was buying Fitbit for $2.1 billion. But they had stated they will complete the deal in the year 2020.

The possibility of that merger was delayed due to Google's immense access to the delicate data from Fitbit’s hardware, consisting of fitness activity, heart rates and sleeping patterns.

Recently The Financial Times reported that, “EU regulators have sent 60-page questionnaires to Google and Fitbit’s rivals, asking them to assess how the acquisition will affect the digital healthcare space; whether it will disadvantage fitness tracking apps hosted in Google’s Play Store; and how Google might use the data to profile users for its search and advertising business”.

Recently, European Union system has given an end-date of July 20th for the following decision regarding the deal. The trading bloc can ask Google for concessions or approve the deal or start an investigation for four months to explore the concerns related to the deal.

Showing concern over this the consumer groups from EU, Canada, Mexico, US, and Brazil mentioned to regulators stating that the deal is just a test case to see if they could constructively govern the data monopolies.

Consumer advocacy groups say the merger is a “test case” for regulators and said, “Google could exploit Fitbit’s exceptionally valuable health and location datasets, and data collection capabilities, to strengthen its already dominant position in digital markets such as online advertising,” as stated by the group, according to a report from CNET. “Google could also use Fitbit’s data to establish a commanding position in digital and related health markets, depriving competitors of the ability to compete effectively.”

Google has assured allies that Fitbit’”s health and wellness data shall not be used for their google ads. In response to this an ally replied that the concern is towards devices, not data. As Google and Fitbit are not direct competitors, neither of them holds enough market to create an argument that the deal creates monopoly.

But the concerns might be raised towards data access as Google has an operative position in online advertising which controls 90% of the market used by publishers to sell display ads. This exposes Google’s ongoing war with the US Justice Department and its own antitrust investigation which speaks about the company's abuse of its advertising dominance.