EU regulators launched an in-depth investigation into Google’s plan to acquire fitness tracking device manufacturer Fitbit on Tuesday.
The European Commission stated that the transaction will strengthen the US technology giant’s position in the online advertising market by “increasing the company’s large amounts of data for personalized advertising.”
Margrethe Vestager, Executive Vice President of the European Commission, said: “Our investigation aims to ensure that Google’s control of data collected through wearable devices during transactions does not distort competition.”
Google agreed to acquire Fitbit for $2.1 billion (approximately Rs 15.72 billion) in November 2019. Privacy, social justice and consumer groups called on the authorities to block transactions on the grounds of privacy and antitrust.
The European Union stated that the transaction may expand Google’s “data advantage”, thereby providing competitors with barriers that rival Google’s online advertising services.
Google’s senior vice president of equipment and services, Rick Osterloh, said: “This transaction is about equipment, not data.” He wrote on his blog: “From the beginning, we It is clear that we will not use Fitbit’s health data for Google advertising.”
The investigation increased the review of the transaction, and the Australian competition regulator is also reviewing it. It highlights the leading role played by EU authorities in the global effort to regulate large technology companies.
Vestager has been at the forefront of controlling movements like Google and its Silicon Valley competitors. In her first five-year term as a competition commissioner, she fined Google nearly US$10 billion (approximately Rs 74,882 crore) for multiple antitrust cases involving the Android operating system, advertising business and shopping services. .
Critics say the high fines have failed to change the behavior of the tech giants and call on regulators to take stricter action.
The European Commission must decide before December 9 whether to block or approve the transaction.
In order to alleviate this concern, Google proposed to put all the information collected from wearable devices into a virtual data warehouse. But this proposal is not enough to meet the requirements of the European Commission. The European Commission said that the proposal does not cover all the data that Google may access after the acquisition.
Regulators will also investigate how Google’s acquisition will affect the digital healthcare industry in Europe, and whether the acquisition will give the company the ability and motivation to make it more difficult for the wearable devices developed by competitors to work with Android.
Agustin Reyna, head of economic and legal affairs at the European consumer group BEUC, said that Google may recommend more concessions to simplify purchases, but it is difficult to see how the company has any way to offset its strong market power. Jointly warn about the dangers of Fitbit trading.
He said: “Here, we are talking about Google acquiring new data sources, which other competitors cannot access.”
Google’s plan to acquire Fitbit marks a bold attempt by the search giant’s health and fitness technology, as it is trying to become a force in the consumer hardware field.
Fitbit is the first to introduce wearable fitness technology, its equipment can track running, cycling and swimming activities, and record heart rate and sleep patterns. The company has approximately 30 million active users worldwide and has sold more than 100 million devices.
According to data from International Data Corporation, Apple dominates the wearable device market, accounting for approximately 30% of wristband and watch sales. Xiaomi, Samsung and Huawei ranked second, while Fitbit ranked fifth.
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