The European Commission is launching a full investigation into Google’s acquisition of Fitbit. EU regulators are worried that the deal will entrench Google’s position as a market leader in online advertising by giving the search giant access to data collected from Fitbit’s health tracking hardware that can be used for personalized advertisements.
“The data collected via wrist-worn wearable devices appears ... to be an important advantage in the online advertising markets,” wrote the commission in a press release. “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.”
In recent months, regulators and consumer groups have signaled their concerns about the $2.1 billion acquisition of Fitbit, which was announced in November 2019. Google has responded to these concerns by promising not to use health data collected from Fitbit devices to target ads, and placing it in a “data silo” separate from its ad tracking business.
But the EU says these assurances were insufficient, as the information Google promised to place in the silo “did not cover all the data that Google would access as a result of the transaction and would be valuable for advertising purposes.”
In addition to its worries about Google strengthening its position in the ad business, the commission is also concerned about the effects the acquisition might have on the digital health market in Europe and interoperability of rival fitness tracking devices with Android.
In a blog post, Google SVP of hardware Rick Osterloh stressed that there was “vibrant competition” to Fitbit’s devices, and the search giant would be happy to make legally binding commitments on how it will use the health data it collects as part of the deal. “We appreciate the opportunity to work with the European Commission on an approach that addresses consumers’ expectations of their wearable devices,” said Osterloh.
The commission now has 90 days, until December 9th, 2020, to conclude its investigation.
Update August 4th, 10AM ET: Updated with comment from Google’s Rick Osterloh.