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Commission clears acquisition of Fitbit by Google, subject to conditions

Christian Fernsby |
The European Commission has approved, under the EU Merger Regulation, the acquisition of Fitbit by Google.

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Topics: GOOGLE   

The approval is conditional on full compliance with a commitments package offered by Google.

Fitbit has a limited market share in Europe in the fast-growing smartwatch segment where many larger competitors are present, such as Apple, Garmin and Samsung. The proposed transaction leads to very limited horizontal overlaps between the activities of Google and Fitbit.

The Commission's investigation focused on the data collected via Fitbit's wearable devices and the interoperability of wearable devices with Google's Android operating system for smartphones.

Some market participants who consider that Google has already a significant presence in the digital healthcare sector, raised a concern that Google may obtain a competitive advantage in this sector by combining Google's and Fitbit's databases to such a degree that competitors would no longer be able to compete.

The Commission's in-depth investigation did not confirm such concerns because the digital healthcare sector is still nascent in Europe with many players active in this space. Moreover, Fitbit has a limited user community in the fast-growing smartwatch segment.

Other market participants raised a privacy concern indicating that it would be increasingly difficult for users to track what their health data would be used for.

The Commission's investigation found that Google will have to ensure compliance with the provisions and principles of the GDPR, which provides that the processing of personal data concerning health shall be prohibited, unless the person has given explicit consent. Such concerns are not within the remit of merger control and there are regulatory tools better placed to address them.

To address the Commission's competition concerns, Google offered the following commitments.

Ads Commitment:

- Google will not use for Google Ads the health and wellness data collected from wrist-worn wearable devices and other Fitbit devices of users in the EEA, including search advertising, display advertising, and advertising intermediation products. This refers also to data collected via sensors (including GPS) as well as manually inserted data.

- Google will maintain a technical separation of the relevant Fitbit's user data. The data will be stored in a “data silo” which will be separate from any other Google data that is used for advertising.

- Google will ensure that European Economic Area (‘EEA') users will have an effective choice to grant or deny the use of health and wellness data stored in their Google Account or Fitbit Account by other Google services (such as Google Search, Google Maps, Google Assistant, and YouTube).

Web API Access Commitment:

- Google will maintain access to users' health and fitness data to software applications through the Fitbit Web API, without charging for access and subject to user consent.

Android APIs Commitment:

- Google will continue to license for free to Android original equipment manufacturers (OEMs) those public APIs covering all current core functionalities that wrist-worn devices need to interoperate with an Android smartphone.

Such core functionalities include but are not limited to, connecting via Bluetooth to an Android smartphone, accessing the smartphone's camera or its GPS. To ensure that this commitment is future-proof, any improvements of those functionalities and relevant updates are also covered.

- It is not possible for Google to circumvent the Android API commitment by duplicating the core interoperability APIs outside the Android Open Source Project (AOSP). This is because, according to the commitments, Google has to keep the functionalities afforded by the core interoperability APIs, including any improvements related to the functionalities, in open-source code in the future.

Any improvements to the functionalities of these core interoperability APIs (including if ever they were made available to Fitbit via a private API) also need to be developed in AOSP and offered in open-source code to Fitbit's competitors.

- To ensure that wearable device OEMs have also access to future functionalities, Google will grant these OEMs access to all Android APIs that it will make available to Android smartphone app developers including those APIs that are part of Google Mobile Services (GMS), a collection of proprietary Google apps that is not a part of the Android Open Source Project.

- Google also will not circumvent the Android API commitment by degrading users experience with third party wrist-worn devices through the display of warnings, error messages or permission requests in a discriminatory way or by imposing on wrist-worn devices OEMs discriminatory conditions on the access of their companion app to the Google Play Store.

The duration of the commitments is ten years.


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