Late last year, Google announced the acquisition of Fitbit, the wearable device maker, in a deal awaiting regulatory approval. However, the current round of acquisitions has not gone well, the Australian Competition and Consumer Commission (ACCC) has recently expressed a series of concerns that the current round of acquisitions may affect the health of the industry competition.
More specifically, the ACCC believes that after completing its acquisition of Fitbit, Google will get more user data and could eventually “raise barriers to entry for potential competitors.”
“Our concern is that Google’s acquisition of Fitbit will allow Google to build a more comprehensive set of user data that further strengthens its position and raises barriers to entry for potential competitors,” said Rod Sims, chairman of the ACCC.
In a statement of questions, the ACCC said Google may eventually favour its products when shipping updates and service-related combinations. “The ACCC is concerned that the acquisition of Fitbit may encourage Google to cancel or otherwise block access to some of these products to increase sales of its wearables at the expense of its competitors,” the statement read. The ACCC is also concerned that Google’s incentive to exclude competitive wearables could increase further if wearables are found to be important to google’s other business segment. “
Google said in its acquisition announcement that Fitbit’s health and wellness data would not be used in Google ads if the deal was successful. In addition, Fitbit promises that users will still have full control over all their data. However, the ACCC said the potential deal would actually mean less competition from Google in the advertising market, as companies that will work with Fitbit will therefore be blocked from accessing data that can be used for targeted advertising.