EU launches ‘in-depth’ investigation of Google bid for Fitbit

EU launches ‘in-depth’ investigation of  Google bid for Fitbit
EU competition commissioner Margrethe Vestager. (AFP)
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Updated 05 August 2020

EU launches ‘in-depth’ investigation of Google bid for Fitbit

EU launches ‘in-depth’ investigation of  Google bid for Fitbit

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.

FASTFACT

Google announced in 2019 that 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.

“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.


WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range

WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range
Updated 24 January 2021

WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range

WEEKLY ENERGY RECAP: Despite long-term challenges, oil prices remain in healthy range

Oil prices have been stable since early January, with Brent crude price hovering around $55. Brent crude closed the week slightly higher at $55.41 per barrel,
while West Texas Intermediate (WTI) closed slightly lower at $52.27 per barrel.

Oil price movement since early January in a narrow range above $50 is healthy, despite pessimism over an increase in oil demand, while expectations of US President Joe Biden taking steps to revive energy demand growth are
still doubtful. The US Energy Information Administration (EIA) reported a hike in US refining utilization to its highest since March 2020, at 82.5 percent. The EIA reported a surprise weekly surge in US commercial crude stocks by 4.4
million barrels. Oil prices remained steady despite the bearish messages sent from the International Energy Agency (IEA), which believes it will take more time for oil demand to recover fully as renewed lockdowns in several countries weighed on oil demand recovery.

The IEA’s January Oil Market Report came as the most pessimistic monthly report among other market bulletins from the Organization of the Petroleum Exporting Countries (OPEC) and EIA. It forecast oil demand will bounce back to 96.6 million bpd this year, an increase of 5.5 million bpd over 2020 levels.

Though the IEA has lowered its forecast for global oil demand in 2021 due to lockdowns and vaccination challenges, it still expects a sharp rebound in oil consumption in the second half of 2021,
and the continuation of global inventory depletion.

The IEA reported global oil stocks fell by 2.58 million bpd in the fourth quarter of 2020 after preliminary data showed hefty drawdowns toward the end of the year. The IEA reported OECD industry stocks fell for a fourth consecutive month at 166.7
million barrels above the last five-year average. It forecast that global refinery throughput is expected to rebound by 4.5 million bpd in 2021, after a 7.3 million bpd drop in 2020.

The IEA monthly report has led to some short term concern about weakness in the physical crude spot market, and the IEA has acknowledged OPEC’s firm role in stabilizing the market.

Controversially, the IEA believes that a big chunk of shale oil production is profitable at current prices, and hence insinuated that shale oil might threaten OPEC market share.

It also believes that US shale oil producers have quickly responded to oil price gains, winning market share over OPEC producers. However, even if US shale oil drillers added more oil rigs for almost three months in a row, the number of operating rigs is still less than half that of a year ago, at 289 rigs.

The latest figures from the Commodity Futures Trading Commission show that crude futures “long positions” on the New York Mercantile Exchange are at 668,078 contracts, down by 18,414 contracts from the previous week (at 1,000 barrels for each contract).