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| The European Union has begun to investigate Google's purchase of Fitbit |
The European Union announced on Tuesday that the European Commission launched an investigation to assess the acquisition of Google Fitbit in November last year.
A $ 2.1 billion deal is currently under review. Because the panel is concerned that Google could boost its position in the online advertising market if it uses Fitbit data to customize the ads it displays to users.
"Our investigation aims to ensure that Google will control the data collected on mobile devices after the transaction is completed. It will not harm the competition," Margaret Westager, vice president of the European Commission responsible for competition policy in the European Union, said in a statement.
The deal is expected to reach a decision on December 9th. The European Union investigation could completely disrupt the Fitbit market.
Since its founding in 2007, Fitbit has been headquartered in San Francisco and has become one of the world's leading manufacturers of mobile devices.
The company sold more than 100 million devices and 28 million users. With the search giant taking over Fitbit, it can prove itself against competitors such as Apple, Samsung, Huawei and Garmin in the mobile market.
To address European Union concerns, Google announced last month that Fitbit Health Data will not be used for advertising purposes. This transaction applies to devices, not data.
"We haven't built or sold any wearable devices yet. We believe the hardware collaboration between Google and Fitbit will increase competition in this area and allow next generation devices to be marketed better and at more affordable prices."
By the end of 2018, Apple holds nearly half of the global smart watch market in terms of shipments. Google has currently licensed Wear OS to Fossil and the other companies, but it has not produced its own smartwatch.
Fitbit has a lot of invaluable user data for data-driven companies like Google.
Google is currently facing a variety of regulatory issues in different countries / regions. This indicates that the company has a problem of trust with some of the supervisory authorities and does not question this basic requirement.
Fitbit is working to keep pace with the extremely competitive mobile device market. The proposed acquisition provides Google with several benefits, including scalability and financial support. However, the uncertainty surrounding the transactions exposes the company to additional challenges. .