European Commission approves Google's Fitbit acquisition with data use, API requirements

The regulator imposed a series of requirements for the tech companies that must be followed for at least 10 years.
By Dave Muoio
12:29 pm
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Following months of regulatory investigation, the European Commission has officially signed off on Google's $2.1 billion purchase of health-wearable-maker Fitbit. Still, the go-ahead is contingent on a handful of commitments from the tech company that focus on its competitive practices across advertising, digital health APIs and smart device interoperability.

"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," Margrethe Vestager, the Commission's EVP in charge of competition policy, said in a statement.

"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.”

Officially launched in August, the European Commission's in-depth investigation involved the collection of "extensive information and feedback from competitors of the merging companies" as well as worldwide competition authorities and the European Data Protection Board, the regulator said.

Google will offer initial concessions on how it would be using Fitbit-collected health information during the initial probe, although pledges to silo the data were deemed "insufficient" by the Commission.

WHAT'S THE IMPACT?

The approval saves Google and Fitbit from the worst-case scenario of a blocked deal, but the tech companies will have eyes over their shoulders for the next couple of decades.

In regards to advertising practices, Google has agreed not to use Fitbit sensor data or user-submitted data for its Google Ads product (limited to users in the European Economic Area); to keep Fitbit user data fully siloed from its advertising data; and to give EEA users a choice whether or not health and wellness data stored in a Google or Fitbit account is accessed by Google's other services.

These agreements will be upheld for at least 10 years, and the Commission has the option to extend these requirements for as many as 10 extra years if deemed necessary.

Further, Google must maintain the Fitbit Web API without adding access fees. And to ensure that the tech company does not look to funnel Android smartphone users to Fitbit or Google wearables exclusively, Google must continue to license public Android APIs for free to Android manufacturers; ensure that these APIs are accessible to Android manufacturers; maintain feature and functionality parity across its core interoperability APIs; and not to degrade user experiences with third-party devices. These API-focused agreements are all set to run for 10 years.

To ensure the companies' compliance with these commitments, a trustee will be appointed prior to the transaction's close to monitor Google's implementations and will have access to range of internal records, personnel and other assets.

Similar to what we've seen with the E.U.'s General Data Protection Regulation (GDPR) from 2018, several of these agreements with the European regulator will likely have some impact on consumers outside of the region as well.

Still it's worth noting that the language for certain requirements – such as those involving the use of individuals' health and wellness data for advertising – is specifically limited to EEA consumers.

THE LARGER TREND

Google and Fitbit announced the acquisition in November 2019. At the time they stressed that Fitbit devices would remain platform agnostic and that the companies would be transparent regarding their use of consumers' health and wellness data. Among the deal's more recent pundits was Amnesty International, which penned a letter to the European Commission warning of potential human rights risks that could result without proper data safeguards.

In addition to the European Commission's investigation and internal discussions amongst U.S. regulators scrutinizing the deal, the Australian Competition and Consumer Commission announced a few weeks ago that it had also begun seeking feedback on the deal and loosely floated three data and interoperability requirements of its own.

Google's parent company, Alphabet, and fellow tech juggernauts Facebook, Apple and Amazon have been square in the crosshairs of government regulators. Each has been called to testify in congressional hearings about their business practices over the course of 2020. Just yesterday 10 state attorneys general formally accused Google of abusing its online advertising monopoly in a new lawsuit.

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