The European Commission has approved the acquisition of Fitbit by Google. According to the EU body, no adverse effects are to be expected, partly because the Commission has imposed some further requirements on Google, such as restrictions on how user data can be used.
In the statement, EU Commissioner Margrethe Vestager said the market for wearables and the associated digital health space remains open and competitive. She substantiates this by pointing to a number of commitments that Google has made. These cover how Google can use the collected data for advertising, the interoperability between wearables from Google’s competitors and Android, and how users can continue to share their health data.
The Commission has previously conducted a thorough investigation into the proposed acquisition. Information was collected from competitors of Google and Fitbit, but also from other participants in this market, national competition watchdogs and the European cooperation of privacy regulators. Based on the findings, it was concluded that the transaction would harm competition in several markets.
The EC is mainly referring to the idea that Google can absorb even more data with Fitbit and thus gain an even greater advantage in the various advertising markets. In addition, there were concerns that competitors’ access to the Fitbit Web API could be restricted. That could hit competing wearable manufacturers by worsening the interoperability of their products with Android.
To meet these concerns, a number of commitments have been enforced from Google for a period of ten years. These can then be extended again for a period of ten years. There will also be a person who will specifically supervise the implementation of the commitments. This person is given broad powers for this, such as access to data, personnel, facilities and technical information from Google.
This includes Google’s commitment that health and fitness data will continue to be accessed via the Fitbit Web API, among other things, without requiring user consent or payment. Furthermore, Google may not use this data for advertising if the data is collected within the European Economic Area through Fitbit products. In addition, the user data is kept separate and stored in a ‘data silo’, so that it is separated from other Google data that is used for advertising purposes. Google has also made commitments to ensure interoperability with Android smartphones.
The Commission did not conclude on the basis of the investigation that the bundling of the databases of Google and Fitbit would give Google such an advantage that competitors would no longer be able to compete. The Commission also points out that the digital health care sector in Europe is not yet mature and that a multitude of players are active in it. In addition, Fitbit has “a small user community in the growing smartwatch segment,” the Commission said. During this acquisition process, Google has always indicated that the acquisition was for the Fitbit devices and therefore the hardware, and not the data.
BEUC, the European Bureau of Consumer Associations, is not exactly happy with the green light that Google has received for the acquisition. This umbrella organization, which claims to represent the interests of consumers in 32 European countries, calls the outcome ‘very disappointing’. BEUC argues that the Commission’s general tool to assess mergers and acquisitions “has not been able to protect consumers in the digital economy”. “Even if the commitments are an improvement over what Google previously offered, it is not enough to ensure effective competition in the wearables and digital health market,” the organization said. According to BEUC, there is a serious risk that Google will exploit Fitbit user data and there is a risk that consumers will soon have less choice.