Google/Fitbit Merger Delay Gets Longer As EU And US Regulatory Picture Gets Murkier

If regulators wring concessions from Big Tech – in a way that blunts at least some of Big Tech’s competitive advantages – isn’t that enough to keep the watchdogs satisfied, giving rise to the level playing field they (in theory) want to create with more regulations?

To put it another way: In the EU, recent actions surrounding the proposed Google-for-Fitbit deal hint that Google may be giving watchdogs the competitive landscape they want in the wearables market – but the  goalposts just got moved.

Late last month, as reported in this space, regulators have been looking at the tech giant and the power it holds in online advertising. There had reportedly been concerns over the proposed $2.1 billion acquisition of Fitbit (announced last fall), and the fact that the deal would boost the amount of data held by Google (particularly, health-related data).

And at the end of September, Google said it would agree to limit the use of Fitbit data in Google ads, and to tighten monitoring.

And in a nod to competition, Google said in a statement that “we’re also formalizing 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 (application programming interfaces) if they want to.”

Up until a few days ago, the deadline was set for December. But late last week, the European Commission pushed the deadline out again, to Jan. 8, 2021. Reuters noted that the pushout could be due to the fact that the companies themselves may have asked for more time. In fact, the extension reportedly came “in agreement with Google.”

But assuming the aim has been to get concessions in place to have more competition in the wearables market, Fitbit has only about 3 percent market share in the global wearable devices market, lagging behind Apple’s roughly 29 percent share, as noted by Telecom.com.

It’s a fragmented market, then, and one that – by dint of Google’s promise to limit Fitbit data use – would ostensibly be (even more) competitive in the wake of the Fitbit deal getting done. Google, in other words, is limiting what it will do in the market – perhaps before watchdogs limit what it can do.

If that is indeed the case, one wonders what may have led Google to press for more time to get the deal done. A few weeks pales in comparison to the fact that the deal for Fitbit was announced roughly a year ago.

Changing Regulatory Landscape 

But the regulatory landscape has changed in just the last few weeks, which may be what spurs Google to make sure it has dotted its Is and crossed its Ts, so to speak. The EU may be watering down at least some markets’ competitive environments, at least insofar as the larger players are concerned.

Earlier this month, in Europe, Margrethe Vestager, who serves as executive vice-president of the EU Commission, has said she would look to use more injunctions against Big Tech, tied at least in part to cases already underway. Injunctions, we’ve noted, have been a tool that can stop individual business/operational actions from proceeding, in a scalpel-like fashion. There are reports of a “hit list” in the EU, aimed in part at how firms use data.

Closer to home, Capitol Hill may (or may not) curtail the very ways in which Big Tech operates. The U.S. House of Representatives antitrust subcommittee published its report on larger technology firms, stating that one regulatory strategy may be to restrict the businesses in which Big Tech can operate. Thus, might we see a bifurcation in how, and even where, Google/Fitbit might operate? The Fitbit delay, incremental though it is, makes the regulatory picture all the murkier.