The Google-Fitbit acquisition is basically a done deal following approval from EU antitrust regulators that arrived earlier today. Well, the stock market seems to think so, at least. Because Fitbit’s stock opened at $7.20 several minutes ago. And it’s trending up, based on what little I understand of candlestick patterns and rewatching that one movie with Michael Douglas and Charlie Sheen.
It’s been over a year since Google and Fitbit announced their intentions to attempt merging. The final offer Fitbit accepted is valued at $2.1 billion, or $7.35 per share. A share of Fitbit hasn’t been worth that much since 2016, though. And due to everything that has been happening over the last 12 months, Fitbit’s valuation was closer to $6.20 than Google’s $7.20 bid over this period.
In other words, the market wasn’t terribly convinced that the deal would actually go through in the end. The European Union has actually been the main reason for that skepticism.
Could anyone still stop the Google-Fitbit acquisition?
Today, however, the European Commission’s antitrust office announced its formal approval of the acquisition. Google agreed to some concessions in order to secure this outcome, which is only natural for such a high-profile deal. With that said, Facebook’s purchase of WhatsApp tells you how much the EC is likely to hold it accountable to its promises. I.e. even if Google was to completely disregard its assurances, it wouldn’t risk anything more than a figurative wrist slap.
The said promises aimed to alleviate concerns about the competitiveness of digital healthcare, advertising, and wearables. Google, frankly, wasn’t required to do much to dispel them. This is why Brussels was expected to greenlight the merger for months by now. As the watchdog, itself, said in today’s announcement, Fitbit’s European market is “limited”, which is about as close to a regulatory burn as you’re going to get.
All of the legitimate concerns surrounding this tie-up were unrelated to antitrust law, anyway. Instead, they mostly revolved around the matter of user privacy. Which isn’t in the purview of the EU competition policy, anyway. And the agency said as much in today’s announcement.
In conclusion, Google will only process Fitbit users’ health data if it obtains explicit consent to do so. But that’s due to the same law that regulates overall online privacy in Europe – GDPR. And that one turned to be pretty ineffective and sloppily written. Because malicious compliance with cookie prompts is all it took to render it useless within months.