Commission clears acquisition of Fitbit by Google

The European Commission has approved the acquisition of Fitbit by Google. The approval is conditional on full compliance with concessions offered by Google to the European Commission.

Executive Vice President Margrethe Vestager, with responsibility for competition policy, said: “We can approve the proposed acquisition of Fitbit by Google because the commitments will ensure that the market for wearables and the nascent digital health space will remain open and competitive. The commitments will determine how Google can use the data collected for ad purposes, how interoperability between competing wearables and Android will be safeguarded and how users can continue to share health and fitness data, if they choose to.”

The decision follows an in-depth investigation of the proposed transaction, which combines Google's and Fitbit's complementary activities. Fitbit has a limited market share in Europe in the smartwatch segment where many larger competitors are present, such as Apple, Garmin and Samsung. The Commission claims that the proposed transaction leads to very limited horizontal overlaps between the activities of Google and Fitbit. 

The Commission's investigation focused on the data collected via Fitbit's wearable devices and the interoperability of wearable devices with Google's Android operating system for smartphones. In its investigation, the Commission has worked in close cooperation with competition authorities around the world, as well as with the European Data Protection Board.

The Commission has cleared the take-over of Fitbit by Google. Here is our reactionhttps://t.co/gGGbaoX9sL

EU merger control proves unable to protect consumers in the digital economy pic.twitter.com/lLmPMYSROM

— The Consumer Voice (@beuc) December 17, 2020

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Some market participants argued that Google has already a significant presence in the digital healthcare sector, raised a concern that Google may obtain a competitive advantage in this sector by combining Google's and Fitbit's databases to such a degree that competitors would no longer be able to compete. 

Other market participants raised a privacy concern indicating that it would be increasingly difficult for users to track what their health data would be used for. The Commission's investigation found that Google will have to ensure compliance with the provisions and principles of the GDPR, which provides that the processing of personal data concerning health shall be prohibited, unless the person has given explicit consent.

Google has proposed a number of remedies. Including a commitment not to make use of the health and wellness data collected from wrist-worn wearable devices and other Fitbit devices of users in the EEA. It will keep health data in a separate “data silo”  to that used for advertising. Users will have the right to grant or deny the use of health and wellness data stored in their Google Account or Fitbit Account by other Google services. These and other commitments will apply for ten years. 

Because of Google's entrenched position in the market for online advertisement, the Commission may decide to extend the duration of the Ads Commitment by up to an additional ten years, having justified the necessity for such an extension.

A trustee will be appointed who will have far-reaching competences, including access to Google's records, personnel, facilities or technical information. The monitoring trustee will also be ‘entitled’ to share the reports it provides for and provided to the Commission with the Irish Data Protection Commission. The commitments also include a fast track dispute resolution mechanism that can be invoked by third parties.

The EU consumer association, BEUC, are disappointed with the Commission's decision:

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