Google’s Fitbit bid under scrutiny
Google is facing a fresh investigation from Australia's competition watchdog over concerns it will harvest intimate health data from Fitbit wearers and use it to dominate the health services market.
The Australian Competition and Consumer Commission (ACCC) announced today that it was in discussions with overseas authorities about Google's $US2.1 billion acquisition of the health and fitness giant in November last year.
The merger has raised privacy and antitrust concerns due its size and the scale of Fitbit's health data and ACCC chairman Rod Sims warned the watchdog could seek to block the takeover.
The ACCC has previously worked with other countries to stop similar acquisitions, including a merger proposed by Siemens last year.
The new Google probe also comes just one month before the ACCC is due to release a draft code for tech giants to pay local news organisations for using their content, in a change that could set a new precedent.
The internet search giant announced plans to purchase Fitbit in November, with devices and services senior vice-president Rick Osterloh saying the company planned to use its resources to "build products to benefit even more people around the world".
Pre-empting criticism, he said Google would also give Fitbit users "the choice to review, move or delete their data" before the acquisition.
Fitbit has more than 29 million active users worldwide, according to Statista, and has sold more than 100 million devices that track sleep, steps, exercise, and can even be used to diagnose medical conditions.
Mr Sims said the ACCC had identified three main concerns about the takeover after a preliminary investigation:
• that Google would use Fitbit data to become the dominant player in health services;
• that it would exclude competitors from using their other services such as Maps;
• and that it would further cement its dominance in digital advertising, limiting competition.
Mr Sims said the internet giant could use Fitbit's wealth of personal data to create more "comprehensive" profiles on individuals to sell ads.
"The information that Google doesn't have is sleep patterns, continuous heart-rate data and, to some extent, the steps that people take," he said.
"There is a unique data set here which does give insights into people's lives which Google doesn't have at the moment. That data could be used to create a dominant position in health services and entrench Google's position in the ad tech market."
The ACCC is expected reach a decision on Google's purchase by August 13.
Australian investigators were already in talks with European regulators over its concerns, he said, and could block the merger internationally if the probe warranted it.
Similar action was taken in a proposed global merger between Siemens and Alstom over rail networks last year.
Alternatively, Mr Sims said the ACCC could prevent Australian Fitbit users having their data collected by Google.
"(Fitbit and Google) and clearly doing business in Australia," he said.
"If we were to oppose it, and we haven't reached that conclusion, we would prevent the acquisition having any effect in Australia. This happens all the time with companies having to divest things in the Australian market to satisfy our concerns."
In a statement to News Corp, Google Australia said: "Throughout this process we have been clear about our commitment not to use Fitbit health and wellness data for Google ads and our responsibility to provide people with choice and control with their data.
"Similar to our other products, with wearables, we will be transparent about the data we collect and why."
Google also faces regulatory action in Australia next month when the ACCC is due to hand down a draft code on tech giants paying local media organisations for the news used on their platforms.
The mandatory code will follow an 18-month ACCC investigation into digital platforms, which recommended a suite of changes to protect businesses, consumer rights, and media groups.
Originally published as Google's Fitbit bid under scrutiny