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The European Commission has finally approved Google’s $2.1 billion acquisition of Fitbit following an antitrust probe. The decision stipulates that Google allows competitive fitness trackers to operate on Android. Regulators in the United States are still scrutinizing the acquisition and could raise objections of their own, but considering EU signoff, the deal is likely to go ahead.
It’s not surprising that the EU would approve the acquisition of Fitbit on antitrust grounds. Google doesn’t already sell fitness trackers of its own, so buying Fitbit won’t reduce the size of the wearables market. To prevent it from squeezing alternatives by restricting access to Android, where Google does have the dominant market share, the company must agree to maintain open access to Android’s activity tracking features for competitors.
And in case you’re wondering, no, under the deal Google won’t be allowed to use any of your health data for ad targeting. It also must allow Fitbit users to choose whether or not their data is shared with third parties. The requirements are to remain in place for the next 10 years.
Google offered the following commitments.
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.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said:
“We can approve the proposed acquisition of Fitbit by Google because the commitments will ensure that the market for wearables and the nascent digital health space will remain open and competitive. The commitments will determine how Google can use the data collected for ad purposes, how interoperability between competing wearables and Android will be safeguarded and how users can continue to share health and fitness data, if they choose to.”
The EU approval follows what the European Commission says was an in-depth investigation of the transaction that focused on how Google would use the data collected by Fitbit’s wearable devices. The Commission was concerned that Google would use collected user data to target advertising, restrict access to that data by competitors, and build specific advantages into Android that would make Fitbit devices work better with Google’s mobile platform.
Though Fitbit arguably created the wearables segment, it lost out long ago to the likes of Apple and Samsung as those companies made health monitoring merely a single feature in their smartwatches.
From £269, people can buy an Apple Watch SE that does fitness tracking and a whole lot more in a sleek, attractive package. Unsurprisingly, Fitbit’s market share in Europe and around the world is marginal when compared to the giants of the smartphone world.
Given Apple’s dominance despite only its recent devices including useful sleep tracking — Fitbit’s key differentiator — it seems unlikely Google will be cornering the wearables market with this acquisition. Given the abject failure of Android Wear, you’ll have to forgive its rivals for a failure to feel threatened.
For Google, buying Fitbit at such a low price could be a steal if it’s able to meld the trackers — and Fitbit’s data from 28 million users — with its smarts in machine learning. Healthcare is a huge, lucrative industry in the United States, and the preventative healthcare market has been a target for tech companies because it’s loosely regulated, and keeping people healthy can lead to better, more affordable health outcomes.
Fitbit has tried to profit in the space by partnering with some healthcare providers to offer wearables and personalized coaching to members. Apple has also partnered with health providers to offer subsidized Apple Watches.