Fitbit tracker – Photo Pixabay
(BRUSSELS) – The EU Commission opened Tuesday an in-depth investigation to assess the proposed acquisition of Fitbit by Google over the amount of data Google could use for personalisation of the ads it serves.
The Commission says its concerns are that the proposed transaction would further entrench Google’s market position in the online advertising markets by increasing the already vast amount of data that Google could use for personalisation of the ads it serves and displays.
Commission executive vice-president Margrethe Vestager, responsible for competition policy, said the 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.”
Following its first phase investigation, the Commission has concerns about the impact of the transaction on the supply of online search and display advertising services (the sale of advertising space on, respectively, the result page of an internet search engine or other internet pages), as well as on the supply of “ad tech” services (analytics and digital tools used to facilitate the programmatic sale and purchase of digital advertising). By acquiring Fitbit, Google would acquire (i) the database maintained by Fitbit about its users’ health and fitness; and (ii) the technology to develop a database similar to Fitbit’s one.
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.
At this stage of the investigation, the Commission considers that Google:
- is dominant in the supply of online search advertising services in the EEA countries (with the exception of Portugal for which market shares are not available);
- holds a strong market position in the supply of online display advertising services at least in Austria, Belgium, Bulgaria, Croatia, Denmark, France, Germany, Greece, Hungary, Ireland, Italy, Netherlands, Norway, Poland, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom, in particular in relation to off-social networks display ads ;
- holds a strong market position in the supply of ad tech services in the EEA.
The Commission will now carry out an in-depth investigation into the effects of the transaction to determine whether its initial competition concerns regarding the online advertising markets are confirmed. In addition, the Commission says it will also examine:
- the effects of the combination of Fitbit’s and Google’s databases and capabilities in the digital healthcare sector, which is still at a nascent stage in Europe; and
- whether Google would have the ability and incentive to degrade the interoperability of rivals’ wearables with Google’s Android operating system for smartphones once it owns Fitbit.
More information will be available on the Commission’s competition website, in the Commission’s public case register under the case number M.9660.
