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After scrutinizing regulations on both sides of the Atlantic Ocean, Google announced on the morning of January 14 that the company had completed the acquisition of wearable pioneer Fitbit. Google’s use of vast amounts of user health data has long been a key issue of regulatory concerns about trading. After all, targeted advertising remains at the core of most of the company’s business.

That’s why both Google and Fitbit are naturally trying to address their concerns in their respective acquisition statements. In particular, Google quickly points out that the deal is all about hardware. Indeed, the company has struggled in this vertical market. Google’s efforts to compete with Apple in the fitness and wearable categories have been uneven, at best.

Rick Osterloh, Google’s SVP of Devices and Hardware, said:

This deal is always about the device, not the data, and we’ve made it clear from the beginning that it protects the privacy of Fitbit users. We work with regulators around the world to take an approach that preserves consumer privacy expectations, including a series of binding pledges to ensure that Fitbit user health and wellness data isn’t used in Google Ads. It’s done.

We also like it by maintaining access to the Android API, which allows devices such as fitness trackers and smartwatches to interact with Android smartphones, and allowing Fitbit users to choose to connect to third-party services. Allows you to sync your health and fitness app to your Fitbit account. These efforts will be implemented around the world to benefit all consumers. We will also work with regulators around the world to ensure that we keep these promises.

Fitbit co-founder and CEO James Park wrote in tune.

We will continue to prioritize user trust, maintain strong data privacy and security protection, provide users with control over their data, and remain transparent about what and how they collect it and why. I will continue. Google will continue to protect the privacy of Fitbit users, ensuring that Fitbit user health and wellness data will not be used in Google Ads and that this data will be stored separately from other Google Ads data. We have made a series of binding pledges with regulators around the world. Google is also committed to allowing Fitbit users to choose to connect to third-party services.

The level and intimacy of the data collected by these types of consumer devices has increased significantly over the last decade. What’s exacerbating that is that companies like Fitbit and Apple are pushing their products to be taken more seriously as medical devices, or at least as medical devices. Both companies are working with insurance companies to outsource health research, seek FDA approval. There is no doubt that these movements will continue to grow.

Many concessions were required to complete the $ 2.1 billion transaction. In particular, the EU issued a number of precautions in December 2021 when it finally approved the acquisition. The EU then said, “How can we use the data we collect for advertising purposes, how to protect the interoperability between competing wearables and Android, and, if the user chooses, health and fitness. The pledge will determine how we can continue to share our data. “

As part of the deal, Google has agreed not to use Fitbit data for advertising purposes for 10 years. The European Commission retains the right to extend its pledge for another 10 years. Google has also agreed to maintain access to the Android API of third-party developers in order to stay competitive.

Founded in 2007, Fitbit has become synonymous with the wearable fitness tracker space. Eventually, however, the advent of smartwatches struggled to maintain an edge, eventually giving Apple Watch a large share. The company eventually made a breakthrough in this area with devices like Versa, but by that time it was thought too late to survive on its own.

Given that the company has been struggling to make a breakthrough with Android Wear / Wear OS, the deal certainly makes sense for Google. With Fitbit, the company acquires an established hardware maker. This isn’t quite different from the company’s purchase of HTC assets to grow the Pixel line of mobile phones. But the Fitbit brand still has enough cash to keep. Notably, Fitbit’s own growth in the smartwatch space was spurred by several unique acquisitions, including smartwatch pioneer and crowdfunding darling Pebble.

In late 2019, Google also acquired Timex’s smartwatch technology for $ 40 million, and it’s highly likely that the company will challenge the Apple Watch directly. Not only was this a big hit for Apple, but it’s not surprising given that it has opened the door to all kinds of health services, including the recently launched Fitness +. If CES in 2021 proves something, it’s that home fitness is a huge business with a lot of upsides and Samsung has also entered.

[Update]The US Department of Justice has issued a clarifying comment, noting that the investigation is underway.

An antitrust investigation into Google’s acquisition of Fitbit (US Department of Justice) is still ongoing. Authorities haven’t reached a final decision on whether to seek enforcement action, but authorities are continuing to investigate whether Google’s acquisition of Fitbit could harm competition and consumers in the United States. I will. We will continue to strive to continue this investigation as thoroughly, efficiently and promptly as possible.

Related article
EU approves Google’s acquisition of Fitbit and agrees to ban health data advertising for 10 years
Apple Fitness + isn’t a substitute for the gym, but enough to sweat
・ The popular category of CES 2021 is “Home Fitness”

Category: Other
Tags: Google, Fitbit, acquisition

Image Credit: Kimberly White / Getty Images

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