July 27, 2021

Europe to further investigate Fitbit acquisition by Google

The European Commission is investigating the acquisition of Fitbit by Google. Both the data and any market disruption are scrutinized.

In November, Google acquired wearable manufacturer Fitbit for $2.1 billion or 1.8 billion euros. The deal soon raised questions, including in Europe.

Now the Commission says it is launching an in-depth investigation into that acquisition. European Commissioner for Competition Margrethe Vestager states in a statement that the use of wearables will increase sharply in the coming years and that more data will also be generated.

“This data provides important insights into the lives and health of users of such devices. Our research aims to ensure that Google’s control over this data does not distort competition.”

Competition

The European Commission reasons that Google has a strong position for advertising services in several European countries, including Belgium. It takes into account the fact that through the acquisition, Google will gain much more insight into users, but that it will also become a competitor of other activity trackers.

The latter is not unimportant if you know that many of those wearables are linked to Android smartphones. For example, there is a chance that Google would favor its own Fitbit over competitors.

Not interested in data

Google itself has already announced at the takeover in November that the interest in Fitbit is mainly in the hardware and not in the data. In a new blog post in response to the European survey, it reiterates that.

“This deal is about devices, not data. We’ve been clear from the start that we’re not going to use Fitbit’s health and wellness data for Google ads.” Said Rick Osterloh, senior vice president for Devices & Services at Google.

Fitbit had approximately 28 million active users at the end of 2019 and has already sold more than 100 million devices. Between the beginning of this year and March, its most recent quarterly results, the company sold 2.9 million units. Good for a turnover of 271.9 million dollars.

In November, Google acquired wearable manufacturer Fitbit for $2.1 billion or 1.8 billion euros. The deal quickly raised questions, including in Europe. Now the Commission says it is launching an in-depth investigation into that acquisition. European Competition Commissioner Margrethe Vestager states in a statement that the use of wearables will increase sharply in the coming years and that more data will also be generated. “These data provide important insights into the lives and health of users of such devices. Our research wants to ensure that Google’s control over this data does not distort competition.” The European Commission reasons that Google has a strong position for advertising services in several European countries, including Belgium. It takes into account the fact that Google will gain much more insight into users through the acquisition, but that it will also become a competitor of other activity trackers. The latter is not unimportant when you know that many of those wearables are linked to Android smartphones. For example, there is a chance that Google would favor its own Fitbit over competitors. Google itself already announced at the takeover in November that the interest in Fitbit lies mainly in the hardware and not in the data. In a new blog post in response to the European survey, it reiterated that “This deal is about devices, not data. We have been clear from the start that we will not use Fitbit’s health and wellness data for Google ads.” According to Rick Osterloh, senior vice president for Devices & Services at Google. Fitbit had approximately 28 million active users at the end of 2019 and has sold more than 100 million devices. Between the beginning of this year and March, its most recent quarterly results, the company sold 2.9 million units. Good for a turnover of 271.9 million dollars.

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