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 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 Australian regulators.

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 engine.

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 Instagram.

"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 extra scrutiny.

"The more sensitive and specific the data, the bigger the risk that it will give rise to competition problems," Ms. Vestager said.

Write to Valentina Pop at


(END) Dow Jones Newswires

August 05, 2020 02:47 ET (06:47 GMT)

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