The European Commission opened an in-depth investigation of Google’s proposed acquisition of Fitbit, it announced on Tuesday. Regulators said they were concerned that the deal would further Google’s dominance in online advertising by “increasing the already vast amount of data that Google could use for personalization of the ads it serves and displays.”
Google and Fitbit signed off on the $2.1 billion deal last year. Since then, regulators from several countries have raised concerns about the large swath of data Google would be able to access.
Fitbit devices collect a variety of metrics: a user’s steps, active minutes, and in some cases, their location or heart rate. Most of this data is not subject to HIPAA requirements, unless it was collected through a business associate agreement, such as an incentive with a user’s health insurance plan.
Earlier this month, the Commission reportedly sought concessions from Google that it would not use this information to improve its search engine, and that it would grant third parties equal access to it, according to the Financial Times. Failure to reach an agreement may have resulted in the protracted investigation.
To allay these concerns, Google had proposed creating a data silo, which would be kept separate from its other datasets and would not be used for advertising. But regulators said it still didn’t address the Commission’s “serious doubts,” as it did not cover all of the data Google would access as a result of the deal.
“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,” European Commission Executive Vice President Margrethe Vestager said in a news release. “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.”
The European Commission said it would further investigate concerns that the deal would add to Google’s dominance of in display and search ads. It will also look into the effects of the merger on competition in the digital healthcare sector, and whether Google would be incentivized to reduce the interoperability of its Android operating system with rivals’ wearables.
Google has been trying to break into wearables for several years with its WearOS operating system, but it hasn’t kept pace with some of the heavy hitters in the space, such as Apple, Fitbit and Xiaomi. Google struck some partnerships with fashion brands like Fossil, but those devices haven’t emphasized healthcare to the extent of Apple and Fitbit, which have both launched studies of their devices’ capability to detect atrial fibrillation.
The European Commission has until December 9 to make its decision. The U.S. Department of Justice is also reviewing the proposed deal, after requesting more information from Google and Fitbit in April.
Photo credit: Fitbit