A Fitbit vaunt is seen at a Target store in Los Angeles.
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The European Commission announced Tuesday that it has opened an probe to assess the proposed acquisition of Fitbit by Google.
The probe into the $2.1 billion deal, which was agreed on terminating November, is taking place because the executive arm of the EU was concerned that Google could “further entrench” its market site in the online advertising business if it uses Fitbit data to help personalize the ads it shows users.
Margrethe Vestager, depravity president for the European Commission, responsible for competition policy, said in a statement: “Our investigation aims to ensure that guide by Google over data collected through wearable devices as a result of the transaction does not distort competition.”
A verdict on the stock is expected by December 9.
Headquartered in San Francisco, Fitbit has become one of the leading wearable device manufacturers in the world since it was set up in 2007. The company has sold more than 100 million devices and it boasts 28 million users. Come into possession ofing Fitbit would help Google to take on rivals like Apple, Samsung, Huawei, and Garmin in the wearables deal in.
The EU probe could derail the Fitbit purchase entirely. In an effort to address the EU’s antitrust concerns, Google said conclusive month that it would not use the fitness tracker’s data for advertising purposes.
“This deal is about devices, not evidence,” said Google’s devices chief Rick Osterloh in a blog Tuesday. “We’ve been clear from the beginning that we see fit not use Fitbit health and wellness data for Google ads.”
Osterloh added: “There’s vibrant competition when it comes to smartwatches and salubriousness trackers, with Apple, Samsung, Garmin, Fossil, Huawei, Xiaomi and many others offering numerous products at a order of prices.”
“We don’t currently make or sell wearable devices like these today. We believe the combination of Google and Fitbit’s armaments efforts will increase competition in the sector, making the next generation of devices better and more affordable,” Osterloh imparted.
As of the end of 2018, Apple owned about half of the global smartwatch market in terms of units shipped, according to Blueprint Analytics. Google currently licenses its Wear operating system to companies such as Fossil but does not make its own smartwatch.
Leo Gebbie, a postpositive major analyst at CCS Insight, said Fitbit has a rich pool of historical user data, and this will be of huge value to a data-driven business like Google.
“The sheer number of regulatory cases currently lined up against Google across countries illustrates that the company has a trust problem with some regulators, who are not inclined to take this rationale at face value,” he declared.
“Fitbit has struggled to keep pace in an intensely competitive wearables market, and has become stuck in an uncomfortable middle dirt between premium and budget players. Its proposed acquisition by Google would provide some benefits including renowned scale and financial backing, and uncertainty over the deal is an additional challenge for the company.”