Google’s plan to acquire wearable tech company Fitbit will be delayed as the European Commission (EC) decided to investigate the deal through the EU Merger Regulation. The probe was prompted to evaluate Google’s use of data, especially with regard to targeted ads.
According to an announcement posted on the EC website, “the Commission is concerned that the proposed transaction would further entrench Google’s market position in the online advertising markets.”
The tech giant is known for showing personalized advertisements, which many users and regulators find intrusive. The EC noted that the merger might “[increase] the already vast amount of data that Google could use for personalization of the ads it serves and displays.”
Google has been trying to purchase Fitbit, which is known for its fitness trackers and smartwatches, said CNet. These devices collect data regarding users’ health including step count, heart rate, and other similar info.
This transaction is seen as Google’s way to compete with other notable tech companies such as Samsung, Huawei, and Apple.
Fitbit seems to be a good choice for Google as it has previously the most dominant company when it comes to wearable tech until it was surpassed by Apple Watch and similar offerings by other companies.
Google’s senior vice president of devices and services Rick Osterloh noted that the firm does not have existing wearable tech, which makes its merger with Fitbit a great competition to the offerings currently in the market.
Osterloh is optimistic that Google’s acquisition of Fitbit will drive the prices of such technology. On top of this, the European wearable device market is expected to grow substantially over the next years, which will result in the growth of the amount of data generated and collected, said EC executive vice president Margrethe Vestager.
With the personal and sensitive nature of such info, Vestager said that the main goal of the investigation is to “ensure that control by Google over data collected through wearable devices as a result of the transaction does not distort competition. ”
In light of these concerns, the tech firm promised that it will not use Fitbit data for generating targeted advertisements. However, the EC decided to continue the probe, which will delay the acquisition by 90 days which will end in early December this year.
This is not the first time Google faced scrutiny from the EC. The company paid a total of $9.3 billion in fines for going against EU competition rules in 2017, 2018, and 2019.
