The European Commission has launched an in-depth investigation into Google’s $2.1bn bid for fitness tracking company Fitbit, citing fears that the takeover could harm competition in online advertising markets.
The investigation will also examine whether a merger of the two companies’ databases and systems would have an effect on the development of Europe’s digital healthcare sector, and whether Google would have the capacity and incentive to reduce the Android operating system’s interoperability with rival wearables in order to privilege Fitbit.
Margrethe Vestager, the executive vice-president responsible for competition policy, said the investigation “aims to ensure that control by Google over data collected through wearable devices as a result of the transaction does not distort competition”.
The commission said that it had concerns that Google would use Fitbit’s data to improve the personalisation of advertisements that it serves on its search engine and other pages. This would make it more difficult for rivals to compete and ultimately lead to “higher prices and . . . less choice” for advertisers and publishers.
Rick Osterloh, Google’s senior vice-president for devices and services, said in a blog post that the deal was “about devices, not data”, adding that the company had been clear from the start that Fitbit health and wellness data would not be used for Google ads and that Fitbit users would be able to “review, move or delete their data”. He also said that there was “vibrant competition” in the wearables space.
Google pledged last month not to use Ftibit’s data to improve its ad targeting. However, the commission said that the commitment to create a virtual data silo would not cover all the information to which Google would gain access and which could be used for advertising.
The Australian Competition and Consumer Commission is also conducting an investigation into whether the merger would have an impact on competition in health and ad tech markets, with its decision due to be announced later this month.
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