Google’s Proposed Acquisition of Fitbit Faces Scrutiny
The European Commission Raises Concerns
Google (GOOGL) has been working on a plan to buy Fitbit (FIT), the health and fitness tracker, since November 2019. This week the European Commission launched an antitrust probe surrounding the proposed $2.1 billion deal.
The European Commission and other privacy and consumer protection advocates have voiced concerns about Google having access to data about Fitbit users’ health. Google already collects data from its email and search services, which it uses for targeted advertising purposes. The Commission will also investigate whether or not the merger will have a negative impact on competition in the wearable health tracker sector.
Investigations in Australia and the US
Australian regulators have also raised concerns about the potential tie-up between Google and Fitbit. The Australian Competition and Consumer Commission began an investigation in June and is due to give a verdict in a matter of days.
Stateside, the US Justice Department is also examining the proposed acquisition, in addition to other, separate antitrust lawsuits against Google. The multinational probe highlights the increased scrutiny that large technology companies must contend with when it comes to their current businesses and proposed acquisitions. Officials at home and abroad will likely continue to raise concerns when companies like Google make bids for smaller competitors to entrench their dominance in certain sectors.
In reaction to concerns from governments around the world, Google has pledged not to use Fitbit data for anything related to advertising. The company has also noted that it will face healthy competition from Apple (AAPL) Samsung (005930:KS), Garmin (GRMN), and other fitness tracking companies.
The European Commission has until December 9 to complete its investigation. Investors will be watching closely to see how this latest battle between lawmakers and Big Tech unfolds.
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