On Tuesday 4 August, the European Commission decided to open an “in-depth investigation” into Google’s proposed takeover of American company Fitbit, the global leader in wearable devices for physical activities (smart watches and fitness bracelets) and connected scales in the sports, health and wellness sector.
The Commission is concerned that the proposed transaction would “further entrench the position” enjoyed by the US multinational Google in online advertising markets “by increasing the already vast amount of data that Google could use for personalisation of the ads it serves and displays”.
“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”, said Margrethe Vestager, the Commission’s Executive Vice-President in charge of Competition Policy.
She pointed out that the use of wearable devices “is expected to grow significantly in the coming years” and 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”, said Vestager.
The world’s leading search engine announced in early November 2019 that it had acquired Fitbit for $2.1 billion, with the transaction set to be concluded in 2020.
However, consumer organisations and the European Data Protection Supervisor (see EUROPE 12430/9) are concerned that the takeover could constitute a threat to the confidentiality of the data and might increase the American giant’s dominant position.
The EDPS believes Google’s acquisition of Fitbit “could result in a high level of risk for privacy and data protection”.
The Commission received notification of the acquisition on 15 June and now has until 9 December 2020 to issue a decision.
The American giant tried to allay the Commission’s concerns on 13 July by committing itself to creating a data silo system whereby certain data collected through wearable devices would be kept separate from any other dataset within Google. The data in the silo would have been restricted from usage for Google’s advertising purposes.
“However, the Commission considers 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”, said the Commission.
One reason for this is that this solution “does not cover all the data that Google would access as a result of the transaction and would be valuable for advertising purposes”, said the Commission. (Original version in French by Lionel Changeur)