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Google’s $3b deal to buy Fitbit given workout by ACCC

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Google’s $3 billion deal to buy fitness tracking pioneer Fitbit could be scuppered by the Australian Competition and Consumer Commission after the watchdog rejected an undertaking that sought to address its concerns about the deal.

The ACCC will continue its investigation alongside the United States Department of Justice (DoJ) which is also reviewing Google’s plans to acquire Fitbit for around $US2.1 billion ($3 billion) and pave the way for Google to challenge Apple in the health-focused wearable sector.

ACCC chair Rod Sims said if the watchdog opposes the deal it could lead to the entire transaction being blocked or the imposition of penalties on Google for going ahead.

Last year, Google offered $US2.1 billion for Fitbit, the activity tracking wearable technology company.

Last year, Google offered $US2.1 billion for Fitbit, the activity tracking wearable technology company.

“We have to decide whether or not we oppose the transaction and we have to take into account that this is an international transaction,” he said. “This is a very dynamic environment. So we really need to see where the DoJ get to, but we also need to think through what are our options in this complex, but really, really important market.”

Google had proposed a court enforceable undertaking in Australia that it would not use health data for advertising and allow competing businesses access to health and fitness data.

A similar undertaking from Google was accepted by the European Commission recently but Mr Sims said he was not satisfied such an undertaking could be effectively monitored and enforced in Australia.

“It’s very hard to police, you’ve got to be watching them all the time, you’ve got to have staff watching them all the time,” he said.

Mr Sims added that the ACCC and DoJ’s chief concern is that the acquisition may result in other rivals apart from Apple being squeezed out of the wearables market as they are reliant on Google’s android system and other services.

“We really don’t want the wearables market to end up in the same duopoly that effectively you’ve got in the phone market, where it’s either an Apple phone or an Android phone.”

He also said that wearable devices, such as smart watches, were becoming increasingly important to Australians and the user data collected by them was likely to become increasingly valuable.

“We don’t know how big wearables are going to get, you’ve got the whole issue of health data, obviously to be in the health business, you’ve got to be in the wearables business, Google’s got a lot of other data so there are many moving parts to this,” he said.

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The ACCC’s continued scrutiny of Google’s proposed acquisition comes as social media giant Facebook faces antitrust allegations in the United States centering on its $US1 billion deal to buy photo-sharing app Instagram in 2012 and its $19 billion purchase of the messaging service WhatsApp in 2014.

A spokesman for Google said the tech giant was disappointed at the delay but would continue to engage with the ACCC to answer its questions.

“We have been working constructively with regulators around the world to close the acquisition of Fitbit and to start building new helpful devices for users,” the spokesman said.

The ACCC has extended its date to review the deal to March 24, 2021.

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