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Antitrust regulators and consumer advocacy groups are increasing scrutiny of the planned acquisition of fitness tracker company Fitbit by Google.

Google revealed last year that it was buying Fitbit for $2.1 billion and that it was planning to close the transaction by 2020. But the acquisition may be delayed due to fears about the increased access of the search giant to sensitive data from the hardware of Fitbit, including the heart rates of users, their fitness activity, and their sleep patterns.

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The Financial Times reports that EU regulators have sent 60-page questionnaires to rivals of Google and Fitbit, asking them to determine whether the merger would impact the digital healthcare space; how it would hinder fitness tracker apps housed in Google’s Play Store; and whether Google could use the data to monitor customers for its search and advertisement business.

The EU authorities have set a deadline for their next vote on the agreement by 20 July. The trading bloc may opt to support the contract, or seek compromises from Google (in terms of how, for example, Fitbit’s data is used), or launch a four-month investigation to thoroughly address issues. The FT notes the degree of specificity in recent questionnaires submitted to competitors of the firms indicates that there may be an extensive inquiry in the works.

The EU is not the only party concerned about the purchase, either. Last month the Trade and Market Commission of Australia reported its questions. “Buying Fitbit would permit Google to create a more robust range of user data, further improve its role and increase entry barriers to future competitors,” said Rod Sims, Chairman of the ACCC.

Consumer advocacy groups have also matched worries from regulators. Twenty consumer groups from the US, EU, Mexico, Canada, and Brazil this week wrote to regulators saying the deal was a “test case” to see if they could reign in data monopolies effectively.

Google made some concessions to allay these fears, saying last year that “Fitbit health and wellness data will not be used for Google ads.” In response to the letter from consumer groups, the corporation said that the deal is “about devices, not data,” adding that the wearables space is “highly crowded” and that the acquisition of Fitbit will only increase competition.

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“It will be incredibly difficult to file a lawsuit,” antitrust counsel David Balto, who was FTC policy analyst during antitrust trials with Microsoft, told Fortune.

In 2019, Fitbit had less than 5 percent of the wearables market, while Apple, the biggest participant, had 32 percent, according to analysts IDC numbers.

Conclusion:

This line of reasoning is likely to stop antitrust authorities from actually blocking the deal, Fortune says because Fitbit and Google aren’t direct rivals and neither of them owns enough of the wearables market to claim that the agreement establishes a monopoly.

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Vinay Kumar
Author

Being a Web Tech Lead and with a relevant experience, Vinay Kumar has gained the art of team and project handling to get the best out of them. During his career, he never stops learning new things. Talking about his interest, he is currently exploring innovative technologies that can bring transformation to businesses.

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