The ACCC Rejects Google’s Attempt to Smooth Over Fitbit Acquisition Concerns

The ACCC Rejects Google’s Attempt to Smooth Over Fitbit Acquisition Concerns
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Google’s acquisition of fitness wearables company, Fitbit, made the Australian Competition and Consumer Commission none too happy back in June. Now, the ACCC has rejected Google’s proposed behaviour undertaking, which the company put forward in an attempt to ease concerns, choosing instead to continue its investigation into 2021.

What was Google’s offer?

Google’s takeover of Fitbit raised some concerns with the ACCC. The regulator put forward a Statement of Issues in June, arguing that the corporation’s unprecedented access to user’s data and its ability to prioritise the advertising of its own products would hurt other competitors in the market.

In November, Google put forward a set of self-imposed parameters regarding its operations for Fitbit in Australia to try and appease the ACCC. These promises outlined that Google would:

  • Not use certain user data collected through Fitbit and Google wearables for Google’s advertising purposes for 10 years, with an option for the ACCC to extend this obligation by up to a further 10 years;
  • Maintain access for third parties, such as health and fitness apps, to certain user data collected through Fitbit and Google wearable devices for 10 years; and
  • Maintain levels of interoperability between third party wearables and Android smartphones for 10 years.

If accepted, these parameters would be court-enforceable by the ACCC, however, they have since been rejected.

Why the ACCC rejected Google’s undertaking

In a statement on December 22, 2020, the ACCC outlined its rejection of Google’s behavioural undertaking. It seems the promises offered by Google were not enough to put the organisation’s concerns to rest.

“The ACCC continues to have concerns that Google’s acquisition of Fitbit may result in Fitbit’s rivals, other than Apple, being squeezed out of the wearables market, as they are reliant on Google’s Android system and other Google services to make their devices work effectively,” said ACCC Chair Rod Sims in a statement.

“We are also continuing to investigate the acquisition’s potential impact on wearable operating systems. The acquisition may result in Google becoming the default provider of wearable operating systems for non-Apple devices and give it the ability to be a gatekeeper for wearables data, similar to the position it holds for smartphones which licence the Android operating system.”

The ACCC outlined that smartwatches are becoming more prevalent in Australian’s lives and thus the data from these devices is much more valuable. The organisation wants more time to further investigate how Google’s acquisition of such a large brand will impact the local consumer market.

“While we are aware that the European Commission recently accepted a similar undertaking from Google, we are not satisfied that a long term behavioural undertaking of this type in such a complex and dynamic industry could be effectively monitored and enforced in Australia,” Mr Sims said.

Certain overseas markets, including Europe, have cleared Google’s acquisition of Fitbit. But even authorities in the US, Google and Fitbit’s home base, are yet to make a decision on the issue. The ACCC has said it will continue to work closely with overseas agencies on this case.

Update: Google has responded to the ACCC’s rejection, saying that it is disappointed with this delay but will continue to engage with the ACCC and answer its questions.

“We have been working constructively with regulators around the world to close the acquisition of Fitbit and to start building new helpful devices for users. As we’ve said from the beginning, this deal has always been about devices, not data, and we are committed to protecting Fitbit users’ privacy,” a Google spokesperson told Gizmodo Australia in an email statement.

The ACCC will continue its investigation into Google’s acquisition of Fitbit and will announce a decision come March 25, 2021.