The European Union (EU) has opened a probe into Google’s proposed acquisition of Fitbit and whether it would hinder competition based on the company’s dominant market position.
The European Commission announced an official investigation into Google on Tuesday, August 4. The Commission is especially interested in Google’s access to Fitbit’s database and the tech giant’s ability to develop a similar database, therefore limiting outside competition.
“The data collected via wrist-worn wearable devices appears, at this stage of the Commission’s review of the transaction, to be an important advantage in the online advertising markets,” the announcement reads. “By increasing the data advantage of Google in the personalization of the ads it serves via its search engine and displays on other internet pages, it would be more difficult for rivals to match Google’s online advertising services.”
The Commission is also worried the merger could strengthen Google’s position in its ad business and the digital health market in Europe.
Google agreed to purchase Fitbit for $2.1 billion last November, and concerns were immediately raised by some about personal data privacy and what might happen to Fitbit users’ data.
The company vowed last month not to misuse the sensitive health data it obtained from the acquisition, in an attempt to ward off an EU probe, but the Commission went through with the investigation. The Commission has until December 9 to end the investigation and make a decision.
“We believe the combination of Google and Fitbit’s hardware efforts will increase competition in the sector, making the next generation of devices better and more affordable,” wrote Rick Osterloh, the Senior Vice President of Devices and Services at Google, in a blog post. “This deal is about devices, not data. We’ve been clear from the beginning that we will not use Fitbit health and wellness data for Google ads.”
The EU investigation could impact antitrust investigations back here in the U.S. Google is currently dealing with probes across the country, as well as a broad antitrust review by the Justice Department.
Google CEO Sundar Pichai had to testify in last week’s Big Tech hearing of Amazon, Apple, Facebook, and Google, and was grilled by Congress members on antitrust grounds and on whether the company stole content from other businesses, such as Yelp.
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