Last year, Google announced was going to acquire Fitbit for a whopping $ 2.1 billion. Immediately, the news rose privacy issues as is Google a tech giant with a lot of advertising datan the cusp to absorb another company with a health data repository. The deal itself has been under intense control by regulators, but today the EU has said yes granted conditional approval.
In context, the EU raised an early stink about a possible merger. In February, the European Data Protection Board warned that the acquisition was a major privacy risk and stressed that the merger should comply with EU GDPR rules. Google then tried to convince regulators to approve the deal by promising it would not use Fitbit health data for targeted advertising. EU regulators fired launching an antitrust probe during the summer.
However, EU approval comes in small print. For starters, Google must live up to its promise not to use Fitbit health data and GPS in targeted ads. Google must also “maintain a technical separation” or “data silo” for Fitbit data that is independent of Google ad data. In addition, users of the European Economic Area (EEA) must be able to choose share or share health and wellness data with other Google services, such as Google Search, Google Maps, the Google Assistant, or YouTube.
The EU also specifically noted that Google should maintain the Fitbit web API, as well as the Android API, to maintain healthy competition in the field of use. (This is good for Wear OS operating systems and third-party Wear OS smartwatch manufacturers.)
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Google must maintain these commitments for ten years, and because Google is such an important player in digital advertising, the EU also stated that it had the right to extend these conditions for an additional ten years.
This is good news for Google (and Fitbit), as it means that it has removed a major regulatory hurdle and is one step closer to having all of Fitbit’s sweet, sweet technology. Still, he has yet to convince others regulators in several other countries. So has the Australian Competition and Consumer Commission studying the agreement. At the end of last month published three proposals aimed at addressing privacy issues that are very similar to EU conditions, including a ten-year moratorium on the use of Fitbit data for targeted ads and the maintenance of third-party access.
The biggest hurdle for Google could come from the United States. In October, the Department of Justice and 11 states filed it an antitrust lawsuit against Google. It is also possible that Google may be hit another antitrust lawsuit of another coalition of states already today. While these suits focus on Google’s dominance in digital advertising and search, it can be difficult to get U.S. regulators to turn a blind eye to this climate. However, the EU approving the deal, even with warnings, may tip the scales in Google’s favor.
For what it’s worth, Alphabet, Google’s parent company, doesn’t seem too worried. The financial director of the alphabet, Ruth Porat, said Bloomberg which expects the deal to be completed by the end of the year.
“We still expect to receive the necessary regulatory approvals to complete the transaction hopefully before the end of this year,” Porat told Bloomberg.
That said, it may take a little longer, as the merger deadline was extended in a filing until February 2021.