Wearable tech makers ramp up opposition to Google’s $2.1bn Fitbit deal

Wearable tech makers ramp up opposition to Google’s $2.1bn Fitbit deal

Rival makers of wearable technology are ramping up their opposition to Google’s $2.1bn acquisition of fitness-tracking company Fitbit, arguing to the EU that it still poses a threat to competition and privacy despite recent concessions made by the search giant.

According to people close to the discussions, a number of major hardware makers and leading cloud services providers have told the EU that Google’s pledges, including a promise not to use Fitbit’s health data to target advertising for 10 years, do not go far enough.

In particular, the groups criticised what they saw as a move to monopolise the wearable technology sector, as well as Google’s proposed method of self-regulation, which involves appointing a monitoring trustee to oversee its compliance with EU regulations.

They also pointed to concerns over the handling of user data if Google were to further integrate Fitbit into its operations. In 2018 Google was accused of breaching public trust when it transferred the health unit of AI company DeepMind, which had contracts with the UK’s NHS to process the data of 1.6m patients, into the control of Google Health.

“We are not able to see how Google can circumvent its promises,” said someone with direct knowledge of the EU’s questions, referring to the lack of visibility over what the search giant could do with Fitbit’s health data after acquiring it.

The arguments came in response to a questionnaire, seen by the Financial Times, which asked a range of health tech companies whether Google’s new solutions were sufficient to assuage their concerns over antitrust and privacy.

Garmin, Samsung and consumer group BEUC are among those to have been consulted.

“We want Google’s commitments to be serious. They are not right now,” said someone advising a Google rival and with direct involvement in the deal. “They are going to have to do better than this.”

The corporate backlash comes as academics and consumer organisations have also expressed concerns over the landmark deal, which was struck last November and has since been beset by concerns over Google’s unprecedented access to Fitbit’s troves of user health data.

In response to an EU probe into the acquisition, Google this week offered a range of promises, including guarantees that other devices would have equal access to Fitbit’s health data following the deal, paving the way for Brussels to clear the acquisition.

However the concessions are mired in complexity, leaving open the possibility for Google to keep all the health data for itself, said someone with direct knowledge of Google’s commitments.

On Wednesday a number of high-profile academics including Tommaso Valletti, a former chief economist at the EU’s competition unit, published a paper outlining their continued concerns over the acquisition.

The experts warned that the Fitbit deal would lead to Google profiting from health data and would ultimately harm consumers. “Unprecedented concerns arise when one sees that allowing for Fitbit’s data gathering capabilities to be put in Google’s hands creates major risks of ‘platform envelopment’, extension of monopoly power and consumer exploitation,” the paper warned.

Despite the pushback from rivals and even opposition from Margrethe Vestager, the EU’s executive vice-president in charge of competition policy, regulators are finding it hard to justify blocking the deal, according to people with direct knowledge of the EU’s thinking.

The EU has set a deadline of Monday to receive feedback from the sector. 

On Tuesday Google said: “This deal is about devices, not data. The wearables space is highly crowded, and we believe the combination of Google and Fitbit’s hardware efforts will increase competition in the sector.

It added: “We have been working with the European Commission on an updated approach to safeguard consumers’ expectations that Fitbit device data won’t be used for advertising. We’re also formalising our longstanding commitment to supporting other wearable manufacturers on Android and to continue to allow Fitbit users to connect to third party services via APIs if they want to.”

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