Alphabet’s Google division is once again facing another European Union antitrust probe, but this time centred on its controversial acquisition of Fitbit.
It was triggered after Google announced last November that it was acquiring Fitbit for $2.1bn (£1.63bn), making it Google’s largest deal in the consumer space since its acquisition of smart home device maker Nest for $3.2bn in 2014.
But almost immediately lawmakers around the world reacted with calls for the deal to be investigated, due to concerns the deal would give Google access to potentially sensitive data about people’s health and lifestyle.
The formal investigation launched by the European Commission this week has been expected, after officials had sent two detailed questionnaires to Fitbit’s competitors in an effort to assess the deal’s potential impact on competition.
Pressure to act increased last month when twenty advocacy groups from the United States, Europe, and Latin America signed a joint statement, saying the deal needed close scrutiny.
Yet a couple of weeks ago EC sources suggested that Alphabet could offset an antitrust probe, if it pledged not to use Fitbit’s data for targeted adverts.
Google quickly responded and offered not to use health data of Fitbit to help it target ads.
But officials soon responded that this data pledge was not enough of a guarantee to avoid a formal antitrust probe on the matter.
And on Tuesday the European Commission finally announced the opening of an official antitrust probe of the deal.
“The Commission is 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,” EU regulators said.
“The use of wearable devices by European consumers is expected to grow significantly in the coming years,” explained executive VP Margrethe Vestager. “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,” said Vestager. “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.”
Google responded to the news, saying that it would cooperate with the process.
“This deal is about devices, not data,” blogged Google’s devices chief Rick Osterloh. “We’ve been clear from the beginning that we will not use Fitbit health and wellness data for Google ads. We recently offered to make a legally binding commitment to the European Commission regarding our use of Fitbit data.”
“As we do with all our products, we will give Fitbit users the choice to review, move or delete their data,” Osterloh wrote. “We appreciate the opportunity to work with the European Commission on an approach that addresses consumers’ expectations of their wearable devices.
“We’re confident that by working closely with Fitbit’s team of experts, and bringing together our experience in AI, software and hardware, we can build compelling devices for people around the world,” he concluded.
But Google is not just facing probes on the matter in Europe.
Last December it was reported that both the DoJ and Federal Trade Commission (FTC) had concerns about the deal, and both will investigate it, as part of a larger antitrust investigation into Google and other tech firms.
Australia’s competition authority has already said that it may have concerns about the deal and would make a final decision in August.
And it should be remembered that Google has a right to concerned about these investigations, as the firm has been stung with three European antitrust fines in the space of two years.
In 2017 for example the European Commission fined Google 2.4bn euros (£2.01bn) after the Commission ruled that Google had thwarted rivals of shopping comparison websites.
Then in July 2018 the European Commission fined Google the record 4.3 billion euros (£3.83bn) for commercial practices related to its Android mobile operating system.
And then in March 2019 European antitrust regulators once again fined Google 1.49bn euros (£1.3bn) concerning the firm’s AdSense advertising service.
Fourth time the charm?
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