Fit and Data Proper: EU Approves $2.1bn Google Fitbit Deal
October 11, 2020
3 min read
What's going on here?
The EU looks set to approve Google’s $2.1bn acquisition of fitness tracker maker Fitbit. The purchase will allow Google to go toe to toe with Apple and Samsung in the wearable technology market.
What does this mean?
In August 2020, the European Commission rejected Google’s pledge not to use Fitbit’s data for advertising purposes – deeming it insufficient. Google has now followed up with fresh concessions to ease competition concerns. The Commission’s main concern is that the deal could entrench the tech company’s power in online advertising and give it unfair access to consumer health data.
To remedy this, Google has offered to restrict the use of Fitbit data for Google ads for 10 years. Rival wearable companies will also gain access to Google’s Android platform. Additionally, third parties will continue to have access to Fitbit users’ data – with users’ consent – on the same terms as Google. This bundle of concessions is likely to clear the way for the approval of the deal according to Reuters. The Commission will now seek feedback from rivals and customers before deciding whether to accept Google’s concessions. If the feedback is positive, the competition watchdog could approve the Fitbit deal before the 23 December deadline.
What's the big picture effect?
While the new concessions address many of the points brought up by rivals, it is unclear if they are truly sufficient to protect consumer data privacy in the long term. There is a danger that Google could mishandle user data if it further integrates Fitbit into its operations later on. For example, in 2018, Google breached public trust when it secretly transferred the health unit of AI company DeepMind (which had contracts with the NHS to process the data of 1.6m patients) into the control of Google Health. So while Google’s pledges on the Fitbit deal are welcome, they are far from binding enough to instil complete confidence. But Google insists that the “deal is about devices, not data” and that it is entering a sector where it faces plenty of competition from Apple, Samsung, Garmin and others. Therefore, despite valid concerns, it will be hard for regulators to justify blocking the deal.
The EU probe of the Fitbit deal is a harbinger of a future in which Big Tech is central to healthcare. The advent of COVID-19 has accelerated the growing interest in digital healthcare. In the UK, public and private health spending already accounts for 10% of national income (GDP). In the US, this figure is 17%. With healthcare’s slice of the economic pie set to rise, it is no surprise Big Tech is diving headfirst into the sector. And as Google insists, it’s not all about data. Another aspect of these deals is to maintain Big Tech’s image of being in support of the nation’s health. Arguably, investments in the digital health sector are a clever marketing strategy that shields companies against antitrust probes. It screams an attack on tech is an attack on health – a narrative that is likely to succeed.
Due to the pandemic, governments have little appetite to go to war with Big Tech over health when they desperately need its help to combat the virus. We need only look at the new NHS test-and-trace app designed by Apple and Google. Against this backdrop, healthcare could become one of the biggest corporate battlegrounds over the next decade. But is it consumers or Big Tech’s pockets that are benefiting in the long run?
Report written by Deniyi Coker
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