Google Fitbit Bid Faces Hurdle -- WSJ
EU antitrust regulator launches investigation into how company
would use health data
By Valentina Pop
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 5, 2020).
BRUSSELS -- Google's plan to buy health tracker Fitbit is facing
monthslong delays after the European Union's antitrust enforcer
launched an in-depth inquiry, echoing recent concerns raised by
Google's planned $2.1 billion bid for the California-based
fitness-and-health data tracker was announced in November 2019, as
the search engine seeks to increase its market share in the
wearable and health data businesses. The announcement caused uproar
among privacy and consumer protection groups, who have raised
concerns over the prospect of Google adding sensitive health data
to the personal profiles it aggregates from its services, including
online searches and emails.
In a bid to allay those concerns, Google, which is owned
Alphabet Inc., has pledged to refrain from using any of the Fitbit
data for advertising purposes.
But the European Commission, the European Union's top antitrust
enforcer, on Tuesday said those assurances are insufficient to
safeguard competition and started an in-depth inquiry into the
planned deal. The Commission's main issue is with health data
consolidating Google's dominant position in the online advertising
business, despite its commitment to keep Fitbit data separate.
The Commission said the probe would examine potential
data-aggregation issues the tie-up would raise in the digital
health-care sector, and the potential impact it would have on rival
wearable devices that use Google's Android operating system.
Google said the deal wouldn't harm competition. "This deal is
about devices, not data," Google Senior Vice President Rick
Osterloh wrote in a blog post. He said the company will continue to
work with regulators to answer their questions.
The European probe comes just days before the Australian
Competition and Consumer Commission is due to give its verdict on
the transaction. In June, the ACCC said the proposed deal could
harm competition in health-data services and in the supply of
wearable devices, while consolidating Google's dominant position in
the online advertising market.
The U.S. Justice Department also is reviewing the planned
acquisition of Fitbit, amid congressional scrutiny over Google's
secret project to collect and analyze the medical health data of
millions of Americans, as revealed by the Journal last year. The
Justice Department is separately preparing a range of antitrust
lawsuits, with several state attorneys general, against the search
Buying Fitbit would help Google catch up with Apple Inc., which
owns a third of the wearable device market, followed by its Chinese
rival Xiaomi Corp., Samsung Electronics and Huawei Technologies Co.
Fitbit used to be the market leader, but by March 2020 it ranked
fifth globally, according to data analytics firm IDC.
The EU probe comes as regulators around the world face mounting
public pressure over their enforcement record, and suggestions that
competition authorities should do more to reign in Big Tech from
growing even bigger, said Verity Egerton-Doyle, a competition
lawyer with London-based law firm Linklaters LLP. Both EU and U.K.
competition authorities have come under fire in recent years for
giving their green light to Facebook's acquisitions of WhatsApp and
"They now have to run the ruler over every aspect of a deal that
may be problematic," she said.
Margrethe Vestager, Europe's competition czar who has fined
Google a total of $9.4 billion for alleged anticompetitive
behavior, said in a recent interview with The Wall Street Journal
that mergers of companies handling sensitive data would receive
"The more sensitive and specific the data, the bigger the risk
that it will give rise to competition problems," Ms. Vestager
Write to Valentina Pop at firstname.lastname@example.org
(END) Dow Jones Newswires
August 05, 2020 02:47 ET (06:47 GMT)
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