14 DAY TRIAL // Google announced in late 2019 that it would take over wearable device manufacturer Fitbit, and now the deal is waiting for regulatory approval.
But as it turns out, the acquisition is already hitting the first roadblocks, as the Australian Competition & Consumer Commission, or ACCC, has expressed a series of concerns that such a takeover could affect competition.
More specifically, the ACCC believes that by taking over Fitbit, Google would get access to even more user data and could eventually end up “raising barriers to entry to potential rivals.”
“Our concerns are that Google buying Fitbit will allow Google to build an even more comprehensive set of user data, further cementing its position and raising barriers to entry to potential rivals,” ACCC Chair Rod Sims said.
No final decision just yet
In a statement of issues, the ACCC says that Google could end up favoring its own products when it comes to shipping updates and services related to its portfolio.
“The ACCC is concerned that the acquisition of Fitbit may provide Google with the incentive to foreclose or otherwise inhibit access to some of these products in order to increase the sales of its own wearables at the expense of its rivals. The ACCC is also concerned that if wearables are found to be important for another segment of Google’s business, Google’s incentive to foreclose competing wearables may further increase,” the statement of issues reads.
Google said in the takeover announcement that Fitbit health and wellness data wouldn’t be used for Google ads should the deal go through. Furthermore, Fitbit promised that users would still have full control over all their data.
The ACCC, however, says a potential deal would actually mean less competition for Google in the ad market, as companies that would partner with Fitbit would thus be blocked from accessing data that can be used for targeted ads.
A final decision on whether to allow the deal to go through is yet to be made, albeit an announcement in this regard is expected in the coming months.