BRUSSELS: The European Commission launched an “in-depth investigation” on Tuesday into whether US tech giant Google’s planned $2.1 billion purchase of smartwatch maker Fitbit would give it an unfair market advantage.
“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,” EU competition commissioner Margrethe Vestager said.
In November last year, Google announced it had reached an agreement to buy Fitbit, which produces wearable fitness trackers and watches that communicate with a health monitoring app.
But Google’s own smartwatch performs a similar function and Brussels is concerned that acquiring Fitbit’s user data will strengthen its already powerful position in targeted advertising.
“The use of wearable devices by European consumers is expected to grow significantly in the coming years,” Vestager said in a European Commission statement announcing the probe.
“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.”
Google has promised not to use Fitbit health data for Google ads, but the buyout has attracted concerns from consumer groups and Australia’s competition commission.
The European Commission now has 90 working days — or until Dec. 9 — to carry out the investigation and decide whether to impose new conditions on Google.
Brussels has acknowledged that Google has created a data silo to keep users’ health data separate from its advertising platforms.
But it warned “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.
“Among others, this is because the data silo remedy did not cover all the data that Google would access as a result of the transaction and would be valuable for advertising purposes,” the statement said.