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European Commission opens probe into Google Fitbit $2.1bn deal

The logo for wearable device maker Fitbit Inc. is displayed on a screen on the floor of New York Stock Exchange, in New York.

The logo for wearable device maker Fitbit Inc. is displayed on a screen on the floor of New York Stock Exchange, in New York.   | Photo Credit: Reuters

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Europe’s competition regulator has opened an in-depth investigation into Google’s proposed acquisition of wearables maker Fitbit.

The European Commission said it is concerned that the deal will further strengthen Google’s dominant position in online advertising by using Fitbit’s data on its users’ health and fitness.

The expected growth of wearables market “will go hand in hand with an exponential growth of data generated through these devices,” Margrethe Vestager, European Commission’s top antitrust regulator, said.

“Our investigation aims to ensure that control by Google over data collected through wearable devices as a result of the transaction does not distort competition.”

The regulator’s concerns arise from its preliminary probe on Google’s commitments that Fitbit’s data will be virtually separated from other datasets.

 

Google had said that the wearable maker’s health data will be kept in a silo, and that its usage will be restricted for the search company’s advertising business.

The commission noted that Google’s data silo approach to be “insufficient” as the remedy did not cover all of Fitbit’s data that can be accessed by Google post its acquisition. Some of this information is said to will be “valuable” for the search giant’s advertising business.

The antitrust regulator has 90 working days to take a decision on the proposed $2.1bn deal.

Google sees this deal as a way to put its software into Fitbit’s hardware, and increase competition in the wearables market, which has many players, including Apple, Xiaomi and Huawei.

“This deal is about devices, not data. We’ve been clear from the beginning that we will not use Fitbit health and wellness data for Google ads,” Rick Osterloh, SVP for Devices & Services at Google, said in a blog post.

Fitbit is one of the earliest wearable makers, and the American company is known for popularising the 10,000 steps goal. The company has been facing stiff competition from other smartwatch makers, like Apple and Garmin.

And the market is only set to grow as more people strap on fitness tracking devices. The global wearable devices market is set to exceed more than $67 billion by 2024, according to data from MarketWatch.

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Printable version | Sep 23, 2020 8:01:07 AM | https://www.thehindu.com/sci-tech/technology/european-commission-opens-probe-into-google-fitbit-21bn-deal/article32302471.ece

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