In a setback to Google’s intention to buy Fitbit, a fitness tracker brand, the European Commission has reported that it is launching an inquiry to look into several antitrust issues related to the multi-quarter deal. This means the deal has been on hold for a time that could last until early December.
The Commission said that it has 90 working days to take a call on the deal — that is until December 9, 2020. Commenting on the launch of an “in-depth inquiry” in a tweet, Commission EVP Margrethe Vestager, who leads both the competition regulation and the bloc’s technology strategy, said: “The usage of wearable apps by European customers is projected to expand dramatically in the years to come. This would go hand and hand with exponential growth in the data produced by these apps. This data offers crucial insights into the life and wellbeing condition of users of these apps. Our investigation seeks to ensure that Google does not hinder competitiveness by manipulating data obtained from wearable devices as a result of the sale.
Google has reacted to the EU’s brake on its plans with a blog post that aims to justify the contract by its apps & services leader, claiming that it would stimulate creativity and contribute to greater competition.
“This offer applies to hardware and not data,” further argues Google VP, Rick Osterloh. The tech giant revealed its intention to step back in November when it unveiled a decision to pay out $2.1BN in an all-cash transaction to snap up the watch manufacturer of Fitbit’s data sets.
Quick forward a few months and CEO Sundar Pichai is being brought to task for issues like ‘helping kill Internet privacy’ by lawmakers on home turf. The still rowdy antitrust drum beat around big tech last year has been a full out rock festival and the background music surrounding tech acquisitions will eventually change.
After news of Google’s intention to catch Fitbit dropped questions about the transaction has been posted across Europe — with consumer advocates, privacy authorities, and innovation and tech policy wink all sounding the alarm in the prospect of seeing the tech giant suck a gadget manufacturer and helping themselves in the end to a bunch of confidential customer health information.
Digital Privacy Rights Alliance, Privacy International — one of the non-profits that advised regulators not to rubber-stamp the transaction — claims that the merger will not just suppress innovation in the developing digital wellbeing industry and wearables, it will also the “what little strain Google is actually under to comply with customer privacy alternatives.
Reuters revisited the agreement last month in a “first” article quoting “people familiar with the matter” who told it that if Google agreed not to use Fitbit data for advertising, the contract could be swept through.
Where the leak behind his news story came from is not clear, but Reuters also ran a statement from a Google spokesperson — who further argued: “In this phase, we were explicit about our determination not to using Fitbit fitness and wellbeing data for Google advertisements and our duty to provide users with preference and control over their results.”
In the case, Google’s headline-grabbing vows to comply with Fitbit data have not stopped EU authorities from wading into antitrust issues for a closer look — which is precisely as it should be.
The tech giant has also given a clear compromise to EU regulators in the hopes of having the Fitbit purchase greenlit — with the Commission stating that it had made promises last month to resolve concerns.