EU Launching Deep Probe Into Google’s Planned $2.1 Billion Fitbit Buy

from ars technica

Regulators in the European Union are launching a deep investigation into Google’s proposed acquisition of wearables maker Fitbit after expressing concerns that giving Google access to Fitbit’s user data could “distort competition.”

The Commission’s in-depth investigation will examine not only the potential outcomes for the advertising market if the transaction goes through, but it will also look at the effects of the deal on the digital healthcare sector and the potential for Google to lock competitors out of access to Android users.

More here.

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7 Comments

  1. While generally I tend to disagree with the government having control over business and industry, this example seems like a crucial time to investigate Googles acquisition of FitBit. Google as many know, is one of the giants in the tech industry, and as a result, have seemingly unlimited power and funding. If google acquired FitBit, and secured its programming onto the devices, Android users would certainly be unhappy. The watch would exclude non-google devices from usage which would create an unfair advantage for the company. It is an ethical dilemma as it would create a serious rift in the market for phone users. People who have previously purchased the watch and do not have Google devices would be excluded from using their watches. Meaning, people would then have to go out and buy google devices. This gives Google and unfair advantage in the smart phone market for the many who wish to purchase smart watches along with their other devices. I agree with the investigation of the bureau of competition and fair trade as this deal creates an unfair rift in this specific market which has much value in today’s economy.

  2. I also agree with John Coster that Google purchasing FitBit could potentially create an unfair environment for the consumers who do not use Google as a product. This is why I believe that Google should go through the processes they are currently going through in order to explore their acquisition of FitBIt. Although it could potentially be unfair for the consumers, I believe that it could also be potentially unfair for Google if they are not allowed to buy a company. Although consumers from the outside mainly see Google as a monster search engine, a large part of Google’s business is in the analytics and information sector. Along with being a search engine as well as a company who owns a lot of other companies, Google collects the information of its consumers and creates more business with the information they gather. In this purchasing situation between Google and FitBit, it is just another move Google is trying to make to not only purchase another company for its monetary benefits, but also to gain more information about FitBits users in order to strengthen their analytical and data sector of the company. In buying a company that holds very large amounts of data like FitBit, it raises some concerns to consumers who do not use Google. This is totally understandable if Google were to use it in order to box out non-Google consumers.

    From what it seems, Europe has continued their investigation with Google since they identified Google as using this potential purchase of FitBit to their advantage which could potentially exclude non-Google consumers unless they bought Google products that were compatible with the products they own now. We are not totally sure if this is the case or not yet but that is why there is an investigation going on. This is why it is extremely important for the governments of every country involved to use their legal knowledge and power to their advantage so Google can not take advantage. This is exactly what the countries involved are doing. For example, in the United States, before Google is allowed to buy FitBit, they have to submit a filing of the potential purchase to both the Federal Trade Commission and Justice Department. This prevents Google from purchasing any company they want right away which could potentially create an antitrust violation environment. Like Europe this filing purchase requirement is a two step process which helps these commissions and departments determine legally if this purchase is acceptable which in return could help consumers.

    I believe that it is the right thing that Google is under investigation for serious antitrust violations and the FitBit acquisition because of how much consumers data they hold and how they could potentially use it against non-Google consumers. Especially because many Google consumers do not know their information is being use for Google’s personal gain. Google should be examined not only because of antitrust but also because they are such a large company and hold a lot of power in our economy and with the purchase of FitBit Google would only become larger.

  3. This article explains the Ethical Dilemma between Google and European regulations. Google purchases Fitbit to integrate Fitbit’s data and system to improve Google’s system about health and fitness. However, this purchase could lead to a takeover against Android that would not have an advantage anymore. Google has the right to use Fitbit’s data and they can use that data as they like, but Europe does not allow the company to do it. In my opinion, European regulation should not be able to limit the usage of data by Google, even if Google is going to shut down the competition. The European Commission can just limit Google only if they investigate and they find out that the purpose of the purchase by Google was to use Fitbit to “kill” the competition. If the European Commission does not find any proof, they should let Google use Fitbit’s data as they like.

  4. I look at this situation from a business and ethical mindset. First, from a business mindset this is totally genius upon the hands of Google. They are planning to make a 2.1 billion dollar purchase of Fitbit and what that would do for them would be great for their business. Fitbit is one of the top fitness tracking companies in the world but they clearly want help beating out their competitors. What attracts consumers to Fitbit is that the watches serve simply for tracking health statistics. Customers love that their information is private, which is rare in this day and age. What do their top competitors have that differ from Fitbit? The simple answer that you can give to that is its versatility. Apple and Samsung have their own fitness watches that compete alongside Fitbit, but what gives them the edge are its ability to do things such as see phone notifications such as text messages, snapchats, phone calls. Your Fitbit can be connected to your Android device, but does not give you those forms of notifications. For Fitbit the mindset they are facing is that they are not at the top of their game but with Google they could provide the jump they need.
    Where we run into the issue is from the ethical side of the potential purchase. The European Union has every right to be concerned because they believe Google will tamper with the data collected. Google has already released a statement stating that this partnership will remain focused on the devices instead of the data in lieu of the concern raised from others. I feel as though the investigation is fair and I acknowledge the antitrust violations they have had of recent. Google has been feared over the past decade because they are continuing to grow. Adding this deal to Google’s backpocket would provide them with the data Fitbit consumers have put into their devices and presumably use it in favor of their advertising.
    Google is a powerhouse and purchasing Fitbit would add to their monopoly as they would enter into the digital health world. In a world of evolving technology and gaining data and knowledge of consumers due to cookie clicks and common search words, Google has been at the forefront of search engines and being able to tap into what would potentially become your health information as well is dangerous for consumers like ourselves. This is why I understand and commend the European Union for stepping and trying to at least probe what is going on with this purchase. You need this form of monitoring when big name companies try to expand an already giant. Another hassle to Google owning Fitbit data is that they are connected to consumers Android’s if they synched them together. Google can be run on the two most owned cell phones along with iPhones if this deal happens meaning for a large portion of the world Google will have some sort of hold to your life. It will be interesting to see what transpires with this probe to say the least.

  5. If we look at investment banks, one segment of their business has seen tremendous growth over the past decade. The total value of successful Mergers and Acquisitions (M&A) in the US has more than tripled since 2009, as all the business sectors have seen incredible consolidation. This growth through acquisition has many wondering if this mass consolidation has lead to anti-competitive markets.
    The tech sector has become the poster-child for this ongoing concern as both the Department of Justice and Federal Trade Commission have conducted many probes into Amazon, Google, Facebook, Apple, and others. These probes evaluate whether a merge or acquisition will lead to an environment where existing and new competitors could not survive against the result of the M/A.
    For example, the DoJ recently gave the green light for T-Mobile and Sprint to Merge. Since they were the two smallest national service providers, their merge would not result in a company whose size would completely overshadow AT&T and Verizon. However, if AT&T and Verizon would propose a merge, that would be almost immediately shot down. From this example, we see that becoming a monopoly is not the benchmark for having an M/A shot down. Instead, it is whether the resulting company can suppress market participants.
    When looking at Google’s attempt to acquire Fitbit, it was assumed that the EU’s main concern was that Google would be able to use data collected from Fitbit users to create targeted advertising, making it a giant among European advertisers. However, the EU still decided to move forward with a second, full-scale probe, after Google offered not to use the data for that purpose.
    The EU is likely concerned that the wearable devices market would be almost entirely dominated by Apple, Samsung, and Google, not allowing for startups to gain a foothold in that market.

  6. I would consider myself pro-business. I believe I the free market and capitalism, but I do believe that the government has to keep an eye on potential monopolies. For example, when President Roosevelt established the anti-trust laws to break up big time monopolies like Rockefeller’s, I believe that was a good move to keep the market free and fair. I do support businesses being able to conquer the market and grow as they please, but I feel like at a certain point its more greed than progress. Obviously you cannot stop people from being greedy so that’s the role of government, to make sure people do not get too greedy and close the barriers of entry for the market. Monopolies end up hurting the consumer and everyone involved except for the producers. I am not saying Google would achieve a monopoly, however, but I think them owning fitbit while having their own line of phones can be dangerous. To my best knowledge Fitbit is compatible with any device that has bluetooth capabilities. iPhones, Androids, Google Phones, Samsungs, and all other types of phones can utilize it. If Google now buys fitbit, they could make it less desirable to use with non-Google phones. Since Fitbit is the biggest company in that industry, it could close off the barriers of entry for new companies to enter the market. In my opinion that would have to be when the government steps in. Apple has the apple watch and I am sure Samsung and Androids have similar devices, but fitbit is still the go-to. Google has not done this yet, as it has not bought Fitbit. Also Google could decide to make it universally adaptable to all types of phones because they would lose money if they took it away, since it is unlikely people would switch to Google phones just for the Fitbit. So I agree with the investigation the EU is doing but I would say action is not needed until the last possible minute, as I believe in a free market and Google is just making a good business decision. I am interested to see where this investigation leads too and how Google will act.

  7. After a deep review and analysis of the article, I found it quite interesting that the primary focus of the merger between Google and Fitbit is related to Google’s intent with the information to be received and the consumer market. Surprisingly, the government is, seemingly, more focused on the ethicality of the transaction, opposed to the financial gain of the company and possibly the country, if the merger is taxable. Furthermore, I found it very interesting that the government requires the submission of notice before mergers over $94 million dollars because it truly shows that the American government has much more power over business interactions than what may meet the eye. Additionally, Google is being reviewed for possible violations of antitrust laws, which may severely impact the mergers if the antitrust violations proven to be true. All in all, it is evident that the government is intent on protecting consumers and market competitors from the powers that rich and powerful businesses possess by placing this “checking system” in place.

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