Last year, Google announced it would acquire Fitbit for a whopping $ 2.1 billion. The news came immediately privacy concerns like google is a tech giant with a lot of advertising data on the threshold of absorption another company with a wealth of health data. The deal itself has been under strict supervision by regulators, but today the EU said it did conditional approval granted.
To clarify, the EU raised an early stench about the possible merger. The European Data Protection Board came in February warned that the acquisition posed a high privacy risk and stressed that the merger would have to comply with EU GDPR rules. Google then tried to persuade regulators to approve the deal by promising it wouldn’t use Fitbit’s Health Data for Targeted Ads. EU regulators overshot launching an antitrust investigation in the deal during the summer.
However, the EU’s approval comes in fine print. For starters, Google must live up to its promise not to use Fitbit health and GPS data in targeted ads. Google also has to “maintain a technical separation” or “data silo” for Fitbit data that is separate from Google advertising data. In addition, users in the European Economic Area (EEA) should be given a choice to choose in or out sharing their health and wellness data with other Google services, such as Google Search, Google Maps, Google Assistant or YouTube.
The EU also specifically noted that Google should keep Fitbit’s web API, as well as the Android API, to maintain healthy wearables competition. (That’s good for Wear OS standards and third-party Wear OS smartwatch makers.)
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Google must keep these commitments for 10 years, and because Google is such a big player in digital advertising, the EU also stated that it had the right to extend these terms for another 10 years.
This is good news for Google (and Fitbit), as it means it has taken a major regulatory hurdle and is one step closer to owning all of Fitbit’s sweet, sweet tech. However, it has yet to convince Others regulators in several other countries. The Australian Competition and Consumer Commission has also been looking for the deal. Late last month published three proposals intended to address privacy concerns very similar to EU terms, including a 10-year moratorium on the use of Fitbit data for targeted advertising and retaining access for third parties.
Perhaps the biggest hurdle for Google comes from the US. In October, the Department of Justice and 11 states filed an antitrust lawsuit against Google. It’s also possible that Google could be beaten yet another antitrust case from another coalition of states already today. While these suits target Google’s dominance in digital advertising and search, it may be difficult to turn a blind eye to US regulators in this climate. Still, the EU’s approval of the deal – even with reservations – could tip the scale in Google’s favor.
For what it’s worth, Alphabet, Google’s parent company, doesn’t seem too concerned. Alphabet CFO Ruth Porat told Bloomberg that she expects the deal to be completed by the end of the year.
“We still expect to get the necessary regulatory approvals to hopefully close the transaction before the end of this year,” Porat told Bloomberg.
That said, it is possible it could take a little longer as the merger deadline was extended in one filing to February 2021.