Google faces EU antitrust probe over the data implications of its Fitbit buy

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There’s now no doubt about it: Europe’s regulators see data as a serious potential antitrust issue.

On Tuesday, the European Commission opened an in-depth investigation into Google’s proposed $2 billion takeover of Fitbit, the wearable-tech firm. The move follows warnings by consumer-rights and privacy advocates in the EU, the U.S. and Brazil, over the possible implications of the deal.

The gist of the probe is that Google—already the leader in online advertising in Europe, where it also has a 94% share of the search market—could further fortify that position by getting access to the health data that Fitbit holds.

Here’s Margrethe Vestager, the EU competition commissioner and digital champion, who has spent the last year warning about the effects of data’s misuse:

“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.”

Around a month ago, Vestager’s department was reported to be asking Google and Fitbit’s rivals about their views on the takeover. That exercise seems to have yielded enough concerns to merit a deeper investigation.

Google said in a Tuesday blog post that the deal was “about devices, not data.”

“We’ve been clear from the beginning that we will not use Fitbit health and wellness data for Google ads,” wrote Google devices and services chief Rick Osterloh. “We recently offered to make a legally binding commitment to the European Commission regarding our use of Fitbit data.”

The Commission noted Tuesday that Google had addressed its initial concerns by promising it would keep “certain data collected through wearable devices” separate from its other datasets, so it can’t be used to tailor ads for Fitbit and Google users.

But no dice. The Commission said Google’s proposal did not cover all the data it would get through the Fitbit buy.

Interestingly, Vestager’s antitrust squad won’t just be looking into the takeover’s potential effects on the European search and display advertising markets, and the advertising technology market—they will also delve into the questions of how the combination of the two companies’ databased might affect the nascent digital healthcare sector.

The team will even examine whether Google would have the “ability and incentive to degrade the interoperability of rivals’ wearables with Google’s Android operating system for smartphones once it owns Fitbit.”

Vestager has thus far whacked Google with three enormous fines, totaling over $9 billion, over its questionable behavior in the advertising, search and smartphone markets.

However, this is a different sort of probe. It’s not about past behavior, but rather about stopping Google from behaving badly in future. It should also take much less time—instead of years, the Commission has until December 9 to make up its mind about whether the takeover can go ahead, and with what strings attached.

The European Consumer Organisation (BEUC) praised the opening of the investigation.

“We have serious concerns that Google’s takeover of Fitbit could significantly harm consumers,” said BEUC director general Monique Goyens in a statement.

“This takeover is likely to be a worrying game-changer not only for how consumers interact with the online world but also for how their health data is used. It is hugely important that the EU carries-out this in-depth examination because wearable devices like Fitbit’s could in future give companies details of essentially everything consumers do 24/7 and feed digital services back to consumers.”

Source: Fortune

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