EU probes Google's deal for Fitbit

BRUSSELS－European Union regulators have opened an investigation into whether Google's proposed acquisition of fitness tracker provider Fitbit will reduce competition in online advertising.

The move was prompted by concerns that the proposed deal would entrench the internet search giant's already strong market position in online advertising by increasing the amount of data that Google could use for the personalization of adverts aimed at its users, the European Commission said in a statement.

Google agreed to buy Fitbit in November for $2.1 billion. Privacy and social justice advocates along with consumer groups have called on authorities to block the deal, citing privacy and antitrust concerns.

By buying Fitbit, Google would acquire the database maintained by Fitbit about its users' health and fitness, as well as the technology to develop a database similar to Fitbit's, the commission said.

The data collected via wrist-worn wearable devices appears－as determined by a newly completed, less-detailed EU review of the transaction－to be an important advantage in the online advertising markets, said the 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," Margrethe Vestager, the commission's executive vice-president responsible for competition policy, said in the statement.

By increasing the data advantage of Google in the personalization of the ads it serves via its search engine and displays on other internet pages, it would be more difficult for rivals to match Google's online advertising services, the statement noted.

'Not about data'

Rick Osterloh, Google's senior vice-president for devices and services, said in a blog post: "This deal is about devices, not data. We've been clear from the beginning that we will not use Fitbit health and wellness data for Google ads."

Last week, the CNBC network reported that a Google acquisition of Fitbit would see the company compete with market leader Apple and Samsung in the fitness-tracking and smartwatch market, alongside others including Huawei and Xiaomi from China.

The report said the European Commission, following the end of the preliminary review on Tuesday, would launch the probe to explore in depth the use of data in healthcare.

In a statement released that day, the commission said it would make a decision no later than Dec 9, nearly six months after it was notified of the proposed transaction.

Addressing the commission's concerns, Google offered to create a silo to separately store the data collected through wearable devices and promised not to use the information for advertising purposes.

But the commission considered the data silo commitment insufficient in addressing the serious doubts identified by officials.

The regulators will also look into how Europe's digital healthcare sector would be affected by the Google acquisition, as well as whether the purchase would give the company the ability and incentive to make it harder for wearable devices developed by rivals to work with Android.

The commission said it will carry out its in-depth investigation over the next four months to determine whether its initial competition concerns are confirmed. The effects of the combination of Fitbit's and Google's databases will also be examined, among other considerations.

Xinhua - Agencies