Advocacy Groups Warn Against Google’s Fitbit Acquisition

EnterpriseInnovationMerger and acquisitionWearable Tech

Twenty advocacy groups from around the world warn that Google’s acquisition of Fitbit risks damaging privacy and competition

Google’s acquisition of fitness device maker Fitbit continues to be under the spotlight after an intervention by a number of advocacy groups.

Twenty advocacy groups from the United States, Europe, Latin America and elsewhere signed a joint statement Wednesday, saying the deal needed close scrutiny, Reuters reported.

Essentially the statement urged regulators to be wary of Google’s bid for Fitbit due to privacy and competition concerns.

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Privacy concerns

Last October shares in Fitbit were suspended amid reports that Google had made a takeover offer for the firm.

Days later it was confirmed that Google was acquiring Fitbit in an $2.1bn deal, which made it Google’s largest deal in the consumer electronics field since its acquisition of smart home device maker Nest for $3.2bn in 2014.

The acquisition means that Google is posed to compete directly against Apple and Samsung in the growing smart watch market, and lawmakers reacted immediately calling for the deal to be investigated when the Fitbit acquisition was announced.

Lawmakers were concerned, because the deal would give Google access to potentially sensitive data.

David Cicilline, chair of the US House of Representatives antitrust subcommittee, said at the time that the buyout would give Google access to users’ “most sensitive information”, including health and location data, which could in turn help further boost its market reach.

In December it was reported that both the DoJ and Federal Trade Commission (FTC) had concerns about the merger, and both will investigate it, as part of a larger antitrust investigation into Google and other tech firms.

Google is also being investigated by a congressional committee and dozens of US states for allegedly using its dominance to harm smaller competitors.

Australia’s competition authority said this month that it may have concerns about the deal and would make a final decision in August.

EU antitrust regulators will decide by 20 July whether to approve the deal with or without concessions, or open a longer investigation.

Sensitive data

Into this heady mix comes the news that 20 organisations – which include the US-based Public Citizen, Access Now from Europe and the Brazilian Institute of Consumer Defense, are warning that the deal would expand Google’s already considerable clout in digital markets.

“Past experience shows that regulators must be very wary of any promises made by merging parties about restricting the use of the acquisition target’s data. Regulators must assume that Google will in practice utilise the entirety of Fitbit’s currently independent unique, highly sensitive data set in combination with its own,” the groups said.

Australian and Canadian groups were among the signatories, Reuters reported.

A Google spokeswoman told Reuters that the tech wearables space was crowded.

“This deal is about devices, not data,” she said. “We believe the combination of Google’s and Fitbit’s hardware efforts will increase competition in the sector.”

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Author: Tom Jowitt
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