EU Regulators Checking if Fitbit Deal Will Boost Google's Clout

EU regulators are checking whether Google's purchase of Fitbit might allow it to drive rival makers of wearable devices, app developers, and other online service providers out of the market, and boost its dominance in online advertising and search.

Healthcare providers are also being asked whether they would see Google as a rival if it is allowed to buy the fitness tracker company in a $2.1 billion (roughly Rs. 15,677 crores) deal criticised by privacy and consumer groups, according to EU documents seen by Reuters.

The EU queries underscore the importance of Fitbit's trove of health data generated from its devices, which are used to monitor users' daily steps, calories burned and distance travelled, and how this could further extend Alphabet-owned Google's market power into a fast-growing area.

A 47-page questionnaire to potential rivals asks if the deal will reinforce Google's dominance in general search and online advertising and how the smartwatches and fitness trackers market will develop if the Fitbit deal does, or doesn't, go ahead.

"In your view, would the aggregation of Fitbit's data to Google's database strengthen Google's position in the supply of online search advertising services?" regulators ask.

They want to know if users will have another option should the prices of Fitbit's devices go up, and whether Google will provide its operating system for smartwatches at less favourable terms, or even stop providing them, to Fitbit's rivals.

App developers for mobile payment services, digital service distribution, navigation, translation, virtual assistant, and search are all being asked if the deal will result in lower prices and more choice, or the opposite.

Another 11-page questionnaire asks healthcare providers whether their customers would migrate to a new Google competing service in the event Google has access to Fitbit's devices or data.

The European Commission is scheduled to decide on the deal by July 20.

Australia's antitrust regulator has warned against the deal, while US and EU advocacy groups have also voiced criticism.

© Thomson Reuters 2020

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