EU approves Google’s $2.1B acquisition of Fitbit

Key Points

The Commission has set a number of commitments that Google must follow over the next decade.

• The Commission wants the market for wearables and digital health to stay competitive.

• Google would not be able to use the health data of Fitbit users in the European Economic Area for ads.

• There would also be a technical separation between both the companies’ data.

The Backstory

Last November, Google agreed to pay $7.35 per share for Fitbit in a cash deal that valued the company at $2.1 billion. The U.S. Department of Justice has not concluded its anti-trust probe into the acquisition. 

EU’s approval came after a the probe into whether it could “further entrench” Google’s market position in the online advertising business if it uses Fitbit data to help personalize the ads it shows to the users.

The Primary Concern

Google’s access to data of Fitbits’ users. Yes, that’s the primary concern seen by the EU lawmakers.

They believe it could undermine the privacy of users and Google could further boost its dominance in the online search market. On the other hand, Google has insisted the deal is about Fitbit’s hardware rather than getting access to its coveted health data.

What Google Says?

“We believe this deal will spur innovation in wearable devices and enable us to build products that help people lead healthier lives. We understand that regulators wanted to look closely at this transaction, and we have worked constructively with them to resolve their concerns, including the set of legally binding commitments the European Commission accepted today.”

“These build on assurances we have made since the beginning that we are committed to protecting Fitbit users’ privacy and will continue to invest in and support manufacturers and developers. We continue to work with regulators around the world to answer their questions about the acquisition.”

A Google Spokesperson said in a statement

What Fitbit users should expect?

According to the commitments, Fitbit users will be able to decide if their data is shared with third parties. It also requires Google to make sure that competitive wearable devices must be able to operate on Android. 

Google has agreed to follow the commitments for 10 years and a trustee will oversee implementation. 

Fitbit is one of the world’s leading wearable device manufacturers. It has sold more than 100Mn devices to date and has over 28Mn users. Acquiring Fitbit would help Google to take on rivals like Apple, Samsung, Huawei, and Garmin in the wearables market.

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