Report: Google can avoid EU probe over Fitbit acquisition by not sharing data

Brief:

Google can avoid an antitrust investigation into its proposed acquisition of Fitbit by promising not to use the exercise tracker's health data for ad targeting, Reuters reported, citing people familiar with the matter. Google in November offered $2.1 billion for Fitbit, a pioneer in the market for wearable fitness trackers, per an announcement.
EU regulators this month asked makers of wearable devices, app developers, online service providers and healthcare providers for their opinions on Google's proposed takeover of Fitbit. The request for comments comes as the EU faces a July 20 deadline to decide whether to approve the deal with or without concessions, Reuters reported.
Today is the deadline for Google to offer concessions, but a failure to do so will spur a four-month investigation after the EU's preliminary review.

Insight:

Google's planned acquisition of Fitbit is likely to have a limited effect on mobile marketers, especially if the search giant is prevented from using health data for ad targeting. It's not clear what other concessions EU's authorities may demand of Google after hitting the search giant with several multibillion-dollar fines for alleged abusive business practices. The region has some of the world's strictest rules on consumer privacy and data sharing, heightening scrutiny of Google's advertising business.

For Google, the acquisition of Fitbit would give the company a stronger foothold in the growing wearables market that is dominated by rivals. Global shipments of wearable devices jumped 30% to 72.6 million units in Q1 from a year earlier, according to researcher International Data Corp. (IDC). The wristband category grew 16% as Fitbit introduced its Charge 4 fitness tracker while Xiaomi and Huawei introduced models with lower price points. Apple is the market leader in wearables with a 29% market share that includes its Apple Watch, Air Pods and Beats headphones, per IDC.

For Fitbit, the acquisition by Google would give the company greater financial backing and technical support to expand its market share from its current level of 3%, as measured by IDC. Fitbit was a pioneer in fitness trackers, but Apple and other technology companies began to dominate the market with more versatile smart watches.

Google can add Fitbit to its hardware lineup that includes the Pixel smartphone, Pixel Buds earbuds, Nest smart-home devices and Google Glass augmented reality (AR) headset. Google two weeks ago acquired smart glasses maker North to expand development of wearables. The company hasn't announced a date for its next Made by Google event to showcase its products as shoppers get ready for the holiday season. Because the coronavirus pandemic has disrupted the supply chains for makers of electronics, it's not clear whether Google will release its Pixel 5 smartphone in the fall as it has done in the past, Android Authority reported.