EC launches probe into Google/Fitbit takeover

Google’s £1.6 billion acquisition of FitBit could be derailed after the European Commission (EC) opened a competition probe into the merger.

The EC announced that it has opened an in-depth investigation to assess the deal and said it should have completed the process by 9 December.

The search engine giant’s parent company Alphabet agreed the takeover the health wearables and smart watch firm in November 2019, however concerns were raised over Google’s intended use for users’ health data.

Last month, Google offered not to use health data gathered from the devices as part of its targeted advertising business.

However, the EC considers that commitment to a “data silo” for health data collected from devices, is “insufficient to clearly dismiss the serious doubts identified at this stage as to the effects of the transaction".

The EC said it had opened an investigation because it was “concerned that the proposed transaction would further entrench Google's market position in the online advertising markets by increasing the already vast amount of data that Google could use for personalisation of the ads it serves and displays”.

Google has said it will work with the EC to assist the investigation.

Following a first phase investigation, the EC flagged concerns about the impact of the transaction on the supply of online search and display advertising services, as well as on the supply of AdTech services, namely analytics and digital tools used to facilitate the programmatic sale and purchase of digital advertising.

By acquiring Fitbit, a statement from the EC read, Google would acquire both the database maintained by Fitbit about its users' health and fitness and the technology to develop a database similar to Fitbit's.

According to the EC, data collected via wrist-worn wearable devices appears, at this stage, to be an important advantage in the online advertising markets.

It warned that the deal could result in Google consolidating its ‘data advantage’ in the personalisation of the ads it serves via its search engine and displays on other internet pages, making it more difficult for rivals to match Google's online advertising services.

In a blog, Google devices chief Rick Osterloh said: "We appreciate the opportunity to work with the European Commission on an approach that addresses consumers' expectations of their wearable devices.”

Margrethe Vestager, the EC’s competition policy chief, said: “The use of wearable devices by European consumers is expected to grow significantly in the coming years.

"This will go hand in hand with an exponential growth of data generated through these devices - this data provides key insights about the life and the health situation of the users of these devices,” she continued, adding: “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.”

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