ANTITRUST

EU Launches Antitrust Review Of Google's Fitbit Deal

Google and Fitbit

Google’s push into the fitness tracker and smart watch market has hit a major snag.

The European Commission on Tuesday (Aug. 4) announced plans to launch a full-scale antitrust review of Google’s planned $2.1 billion acquisition of Fitbit.

While Google had pledged not to use health data collected through Fitbit to target ads, the assurances failed to sway skeptical EU regulators, who remain concerned the search giant might take advantage of the massive trove of health and other data it would acquire through the deal.

“The use of wearable devices by European consumers is expected to grow significantly in the coming years,” said European Commission Executive Vice President Margrethe Vestager, who heads the EU’s competition policy, in a press release.  “This will go hand in hand with an exponential growth of data generated through these devices. Our investigation aims to ensure that control by Google over data collected through wearable devices as a result of the transaction does not distort competition.”

In the announcement of the review, which will take four months to complete, the European Commission — which is the European Union’s executive branch — indicated that Google, in its attempts to dispel the commission’s concerns about its use of Fitbit data, had not gone far enough.

In particular, Google had offered to create a “data silo” where “certain data collected through wearable devices would have been kept separate from any other dataset within Google” and would have been barred from being used for advertising, the commission noted.

The problem, according to the EU, was that Google’s data silo proposal failed to cover all the data that Google would acquire through Fitbit and which could be used to bolster its advertising arm.

“The Commission considers that the data silo commitment proposed by Google is insufficient to clearly dismiss the serious doubts identified at this stage as to the effects of the transaction,” EU regulators said in the press release.

Google has argued its deal with Fitbit won’t put a damper on competition, pointing to what it contends is a crowded field for fitness trackers and other wearables.

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