Google's acquisition of Fitbit last November was immediately questioned by several regulatory bodies over concerns that it may reduce competition. Now, the European Union (EU) is gearing up to launch an investigation on the deal.
The European regulatory body is concerned that Google’s proposed $2.1 billion takeover of Fitbit would bring along all the sensitive health data the latter has collected from its users over the years. This would further strengthen Google's dominance in the advertising business, where it faces little competition.
The EU has reportedly queried potential rivals of the two companies about whether this deal will "reinforce Google’s dominance in general search and online advertising".
"In your view, would the aggregation of Fitbit’s data to Google’s database strengthen Google’s position in the supply of online search advertising services?" regulators ask. In a 47-page questionnaire, the EU also asks how this deal would affect the smartwatches and fitness trackers market.
Google acquiring Fitbit means it'll be making its own smartwatches and fitness devices. Effectively, it may stop providing its operating system (Wear OS) to rival companies. The EU asks what choices users will have should the prices of Fitbit devices go up under the new ownership.
The regulators are also asking app developers about how this deal will impact them. They want to know whether it will lower the prices and bring in more choices, or the opposite may happen.
Additionally, in a separate 11-page questionnaire, the EU has asked healthcare providers whether their customers who use Fitbit devices would stay with Fitbit should Google gain access to its data or will they migrate to a new competing service.
The EU reportedly has until July 20 to take the decision on whether to continue investigating or approve the deal.
Along with the EU investigation, the Google-Fitbit deal is facing more troubles
The European Union isn't the only regulatory body questing Google's acquisition of Fitbit. The Australian Competition and Consumer Commission (ACCC), the country's regulatory agency, has also warned against the deal. The ACCC has similar concerns about competition and privacy.
Additionally, several advocacy groups from around the world have also voiced criticism and urged regulators to be wary of the deal.
“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 utilize the entirety of Fitbit’s currently independent unique, highly sensitive data set in combination with its own,” the groups said. A total of 20 advocacy groups from the US, Europe, Latin America, Canada, Australia, and elsewhere have signed the statement.
Google, meanwhile, has maintained that it will not use Fitbit's data for ads. "This deal is about devices, not data," a Google spokesperson told Reuters. "We believe the combination of Google’s and Fitbit’s hardware efforts will increase competition in the sector."
The company had last year said that "Fitbit health and wellness data will not be used for Google ads". It also promised to give existing Fitbit users the choice to "review, move, or delete their data."
The Google-Fitbit deal is yet to go through all the required regulatory approval in the US as well. However, the American officials have yet to indicate if they will approve the deal or launch similar investigations.