European regulators are investigating Google’s proposed $2.1 billion takeover of Fitbit, the San Francisco-based wearable technology maker, the Financial Times reported.
Consumer and privacy groups have argued that the deal should be blocked because Fitbit will give its new owner more data, making it impossible for other providers to compete against the popular search engine and advertising business, the news service reported.
The European Union (EU) sent in-depth questionnaires to Google’s and Fitbit’s rivals to determine whether the merger could potentially hurt competition – specifically, whether fitness tracking apps in Google’s Play Store will suffer and whether the deal would provide Google with expanded profiling information to give its online search and advertising businesses an advantage, the report noted.
In a separate move, nearly two dozen consumer groups, including the European Consumer Organization (the Belgium-based umbrella group that represents 45 consumer agencies from 32 countries), and the Consumer Federation of America, the Washington, D.C. consumer interest nonprofit, sent out a warning about the transaction on Thursday (July 2).
“Regulators must assume that Google will in practice utilize the entirety of Fitbit’s currently independent unique, highly sensitive data set in combination with its own, particularly as this could increase its profits, or they must impose strict and enforceable limitations on data use,” they said in a joint statement.
The EU has until July 20 to make a decision of whether to approve the deal.
The Australian Competition and Consumer Commission, the government’s regulatory agency, has warned the deal could strengthen Google’s position. “Past acquisitions by Google, of both startups and mature companies like Fitbit, have further entrenched Google’s position,” Chairman Rod Sims told FT. “The access to user data available to Google has made it so valuable to advertisers that it faces only limited competition.”
Australia and the 27-nation bloc that makes up the EU are not the only watchdogs examining the proposed deal. In December, PYMNTS reported that the U.S. Department of Justice (DOJ) planned to investigate the Google–Fitbit deal for potential antitrust issues.
When the deal was proposed last year, Rick Osterloh, senior vice president for devices and services at Google, vowed that the company will be transparent about the data they collect and why. He promised that Google will never sell personal information and that Fitbit health and wellness data will not be used for Google ads.
“Throughout this process, we have been clear about our commitment not to use Fitbit health and wellness data for Google ads and our responsibility to provide people with choice and control with their data,” he said. “Similar to our other products, with wearables, we will be transparent about the data we collect and why. And we do not sell personal information to anyone.”
Selected by Fintech Tube