ACCC raises competition concerns about Google's acquisition of Fitbit

The Australian Competition and Consumer Commission (ACCC) has raised preliminary competition concerns about Google's proposed acquisition of Fitbit.

Google announced its initial intention to buy the fitness tracker pioneer for $2.1 billion in November, which would give the search engine giant ownership of Fitbit's enterprise business and a wealth of consumer health data.

In a published statement of issues, the ACCC has outlined how Google's access to consumer health data through its acquisition of Fitbit could potentially raise entry barriers and adversely affect competition for digital advertising and health markets.

"Our concerns are that Google buying Fitbit will allow Google to build an even more comprehensive set of user data, further cementing its position and raising barriers to entry to potential rivals," ACCC chair Rod Sims said.

In addition, the ACCC said it is also considering whether Google is likely to favour its own wearable devices over competitors' when supplying related services such as Google Maps, WearOS, or the Google Play Store.

"The ACCC is concerned that the acquisition of Fitbit may provide Google with the incentive to foreclose or otherwise inhibit access to some of these products in order to increase the sales of its own wearables at the expense of its rivals," the statement of issues said.

Sims revealed the concerns follow the ACCC's Digital Platforms Inquiry that uncovered how Google's market power is built on access to search and location data, and data collected via third-party websites and apps.

"Past acquisitions by Google, of both start-ups and mature companies like Fitbit, have further entrenched Google's position. The access to user data available to Google has made it so valuable to advertisers that it faces only limited competition," he said.

An investigation by the ACCC is now currently underway into these preliminary concerns.

As part of this process, the consumer watchdog is seeking feedback on its statement of issues to help understand the extent of which Fitbit data is unique and whether or not there are other sources of this data, the likelihood that other competition could constrain Google in data-related health services post-acquisition, and the likelihood it would change Google's incentives to provide third-party access to other Google products, such as Google Maps or the Google Play Store.

"The ACCC's investigation is focussed on certain online advertising services and nascent data-dependent health markets. We will explore the uniqueness and potential value that Fitbit's data poses for Google, and its likely competitors in these advertising and health markets," Sims said.

Feedback on the ACCC's statement of issues is due 10 July 2020.

The ACCC expects to make a final decision on 13 August 2020.

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