Google’s planned $2.1bn (£1.6bn) takeover of smartwatch maker Fitbit will be investigated by the European Commission.
It comes amid concerns about how health data could strengthen the search engine’s power in online advertising.
EU regulators are worried the deal may give Google an advantage over rivals by having access to data from Fitbit’s fitness trackers that can be used for personalised adverts.
Image: EU commissioner Margrethe Vestager wants to ensure the deal does not distort competition
The commission said: “The data collected via wrist-worn wearable devices appears, at this stage of the commission’s review of the transaction, to be an important advantage in the online advertising markets.
“By increasing the data advantage of Google in the personalisation of the ads it serves via its search engine and displays on other internet pages, it would be more difficult for rivals to match Google’s online advertising services.
“Thus, the transaction would raise barriers to entry and expansion for Google’s competitors for these services, to the ultimate detriment of advertisers and publishers that would face higher prices and have less choice.”
The commission will focus on online search advertising where it says Google is dominant in most of Europe and on online display ads where it claims the company holds a strong market position in 20 European countries including the UK.
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The investigation will also look at digital healthcare and whether Google would make it difficult for rival wearables to function with its Android smartphone operating system.
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Google announced last November it had reached an agreement to buy Fitbit, a California-based firm which helped pioneer the fitness tracker market.
Google, whose parent company is Alphabet, has promised not to use health data collected from Fitbit devices to target ads and will place it separately in a “data silo”, which is a virtual storage of data.
But the EU believes those assurances are not sufficient, as the information the search engine vowed to put in the silo “did not cover all the data that Google would access as a result of the transaction and would be valuable for advertising purposes”.
Image: Fitbit has helped pioneer the fitness tracker market
In a blog post, Google has insisted the “deal is about devices, not data”.
It said: “There’s vibrant competition when it comes to smartwatches and fitness trackers, with Apple, Samsung, Garmin, Fossil, Huawei, Xiaomi and many others offering numerous products at a range of prices. We don’t currently make or sell wearable devices like these today.”
Speaking about the in-depth inquiry, EU competition chief Margrethe Vestager said: “This data provides key insights about the life and the health situation of the users of these devices.
“Our investigation aims to ensure that control by Google over data collected through wearable devices as a result of the transaction does not distort competition.”
The commission has 90 days, until 9 December, to complete its investigation.
Source : Sky News