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EU launching deep probe into Google’s planned $2.1 billion Fitbit buy

Enlarge / Logo of Google is displayed on a smartphone by logo of Fitbit in Brussels, Belgium on August 4, 2020.

Regulators in the European Union are launching a deep investigation into Google’s proposed acquisition of wearables maker Fitbit after expressing concerns that giving Google access to Fitbit’s user data could “distort competition.”

The Commission’s in-depth investigation will examine not only the potential outcomes for the advertising market if the transaction goes through, but it will also look at the effects of the deal on the digital healthcare sector and the potential for Google to lock competitors out of access to Android users.

Data provided by wearable devices “provides key insights about the life and the health situation of the users of these devices,” Margrethe Vestager, the European Commission’s head of competition, said in a written statement. “Our investigation aims to ensure that control by Google over data collected through wearable devices as a result of the transaction does not distort competition.”

Google announced its plan to acquire Fitbit back in November in a transaction valued at $2.1 billion. Any merger or acquisition of that scale draws antitrust attention, both in the US and in the EU, and regulators in every country where the companies operate began their merger review processes.

European merger reviews take place in two phases. In the first phase, competition regulators conduct a preliminary investigation. If they don’t identify any real problems with the deal, the companies can go forward with their transaction. If the preliminary investigation does reveal the potential for harms, however, then regulators move to a phase two probe.

Following the phase one investigation, the competition bureau demanded concessions from Google in the acquisition. Sources said at the time that if Google did not meet those terms a protracted investigation would likely follow, and that now seems to be happening.

The transaction is also meeting with deep scrutiny here in the US. Under US law, companies planning a merger over a certain value (currently $94 million) have to submit a notification to both the Federal Trade Commission and Justice Department. Once a company has submitted that filing, regulators have 30 days to take a look at the proposal and determine whether to issue a second request for more information and probe deeper. The DOJ issued such a second request to Google and Fitbit in April, and it’s currently reviewing the deal.

Google, meanwhile, is under deep scrutiny for potential antitrust violations basically everywhere. The European Commission is among the many agencies probing its behavior and market dominance, as are the DOJ, the attorneys general of 50 US states and territories, and Congress, which grilled Google CEO Sundar Pichai, along with the heads of Apple, Amazon, and Facebook, about antitrust matters in a six-hour hearing last week.

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