On Tuesday, South Africa’s Competition Commission conditionally approved Google’s takeover of Fitbit, which sells a range of wristbands that track fitness and movement.
Google announced last month that it wanted to buy Fitbit for $2.1 billion (more than R30 billion). The deal will give the search giant access to 27 million Fitbit users.
Google must get approval from several authorities – including the EU, US, Australia, Canada and Japan – for the global deal. The EU gave a conditional go-ahead last week, but on Tuesday, the Australian competition authorities expressed concern that Google could make it harder for other companies to compete. It is continuing its investigation and will only make a decision on 25 March.
“The [Australian Competition and Consumer Commission] 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,” the authority said in a statement.
“As a direct result of the proposed merger, Google will be able to exclude competing suppliers of wrist-worn wearable devices from accessing its Android operating system for smartphones. This will significantly alter the market structure for the supply of wrist worn wearable devices in SA and increase barriers to entry for potential entrants in the market,” it said in a statement.
But unlike the Australian authority, the local commission was satisfied with Google’s commitment to making access to Android available, for free and “on a non-discriminatory basis”, to all competing manufacturers of wearable devices for at least the next ten years.
The commission was also worried about the fact that Google will now own Fitbit’s database of users’ health and fitness information, and that it can now use the data to give it a further advantage in selling online advertising, which it is already dominating. But Google said it won’t use the “Measured Body Data” or “Health and Fitness Activity Location Data” from Fitbit for Google Ads. “Further, Google commits to present each South African User the choice to grant or deny use by Other Google Services (excluding Google Ads) of any Measured Body Data stored in their Google Account or Fitbit Account,” the commission confirmed.
Its last point of concern was that Google will now be able to use Fitbit’s health data to launch health services, for example health insurance, and exclude other companies by restricting access to Fitbit health data. Google said that it will allow existing third-party access to Fitbit’s data, subject to user consent.
If Google goes ahead with the Fitbit takeover without Australian consent, it faces a fine of up to $400 m