Last week, reports suggested that the European Commission was set to launch an investigation into Google's acquisition of wearable manufacturer Fitbit. Today, the organization confirmed that it is indeed beginning an in-depth investigation of the deal with the goal of determining how it can affect competition.
Specifically, the Commission has concerns with Google's access to user data, and how the acquisition of Fitbit would give the advertising giant even more ways to target ads at every kind of user. Regulators believe that this would put Google's rivals in the "ad tech" space at even more of a disadvantage, since the company would have even more data to target users compared to many newcomers.
Margrethe Vestager, the European Commision's head of competition policy, said:
“The use of wearable devices by European consumers is expected to grow significantly in the coming years. This will go hand in hand with an exponential growth of data generated through these devices. This data provides key insights about the life and the health situation of the users of 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.”
Google has a long history of antitrust investigations, and there's reason for that. As noted in the announcement, Google is considered a dominant force in online search advertising services, and "holds a strong market position" in both the supply of online display advertising and ad tech services in many or most countries in the European Economic Area.
The investigation will also try to determine how the combination of Google' and Fitbit's databases will affect the digital healthcare sector, and if Google will be able to make the experience on other wearables worse for Android users once it makes it own devices with Fitbit.
Aligning with the European Commission's announcement, Google released its own statement on the matter, reiterating that the acquisition of Fitbit is about devices, not data. The company says it's willing to make a binding commitment to the regulator regarding its use of Fitbit data, and it also believes that it will be able to increase competition in the wearable space with its acquisition of Fitbit, seeing as Google currently doesn't make its own wearables anyway.
The European Commission has 90 business days to complete the investigation, meaning a decision will need to be made on or before December 9.