Does Google say it is closing the acquisition of Fitbit – uh, without DOJ approval?

Google’s senior vice president of hardware Rick Osterloh announced on Thursday that Google has closed the acquisition of Fitbit. The $ 2.1 billion deal was announced in November 2019 and started a regulatory review process by governments around the world concerned about Google’s influence on the Internet and the data it can collect about users.

Typically, Osterloh announcing that “Google has completed its acquisition of Fitbit, and I want to personally welcome this talented team at Google” would mean that Google has overcome its worldwide regulatory challenge. Google’s announcement today is highly unusual, as the Justice Department has yet to complete the deal. As the DOJ told the New York Times reporter Cecilia Kang, “The Antitrust Division’s investigation into Google’s acquisition of Fitbit is ongoing.” Australian regulators have also not announced a final decision on the merger. It seems particularly provocative for Google to do something like this while also dealing with a DOJ antitrust investigation.

When asked about the status of the DOJ merger investigation, a Google spokesman told Ars: “We have completed the DOJ extensive review in the past 14 months, and the agreed waiting period has expired without objection. We remain in contact with and are committed to answering any additional questions. We are confident that this business will increase competition in the highly crowded wearable market and have made commitments that we plan to implement globally. “

Regardless of how legal issues work, the announcement doesn’t reveal much about Google’s future plans for Fitbit. Osterloh starts by praising the existing Fitbit line, highlighting the Fitbit Sense smartwatch, the Inspire 2 tracker and various Fitbit health metrics. Google doesn’t make cheap fitness trackers, but the company’s Google Fit app has a lot of overlap in both smartwatches and health metrics. Google says it wants to “make health and wellbeing more accessible to more people” and “we are confident that the combination of Fitbit’s leading technology, product experience and health and wellness innovation with the best of AI , software and hardware from Google will generate more competition in wearables and make the next generation of devices better and more accessible. ”

Fitbit CEO, President and Co-Founder James Park also posted a blog post today, saying: “Many of the things you know and love about Fitbit will remain the same. We will continue to be committed to doing the right thing, to taking care of your health and well-being at the heart of everything we do, in addition to offering an approach that is not for everyone with options that work on Android and iOS. “

Fitbit and Google overlap

Google’s existing wearables platform, Wear OS, looks pretty dead. The last major update of the operating system was in 2018, and even before that, Wear OS never had a solid hardware base to build on. Qualcomm – the leading Android SoC provider – never gave Wear OS a chance, preferring to stifle the smartwatch platform with absolutely terrible SoC releases. Since the start of Wear OS in 2014, Qualcomm’s marketing department has created the Snapdragon 400, Wear 2100 and Wear 3100, but in essence they are all Cortex A7 SoC quad-core based on a 28-man manufacturing process. nm. It wasn’t until the Wear 4100 announcement in 2020 that Qualcomm launched a wearable SoC that will have a higher benchmark than the original chips in 2014.

On the other hand, Wear OS ‘main competitor, the Apple Watch, has the luxury of Apple’s internal SoC division, which sees regular performance improvements each year. Apple officially doesn’t talk much about the chip’s specs, but says that the latest Apple Watch S6 SoC is based on the A13 Bionic, and since the A13 is 7 nm, the S6 is probably also. As a 12 nm Cortex A53 quad-core SoC, the Snapdragon Wear 4100 is not yet competitive with what Apple is launching, with Qualcomm promising only an 85 percent improvement in performance compared to seven years ago. When you’re starving, though, everything looks like a delicious meal.

Google Fit fell victim to Google’s impulsiveness: the company says she cares about a particular market, but she just can’t keep the products focused, working and adequately supported in those markets. Wear OS used to have the best weight training tracking, which automatically detected and recorded training movements, but Google inexplicably eliminated the feature about two months ago. There used to be a Google Fit website, which, like Fitbit, presented all of its statistics from a large panel, but Google eliminated the Google Fit website in early 2019, after years of neglect. He never ended up supporting features like Wear OS weight tracking, launched in 2017.

Neither Google Fit nor Wear OS was mentioned once in Google and Fitbit ads on Thursday.

Fitbit is also not a successful acquisition in the health sector. Although the company was a pioneer in the original over-the-counter market and could (perhaps) be seen as a valuable brand, Fitbit’s market share has dropped to single digits thanks to increased competition. Apple is attacking high-end with the Apple Watch, and Chinese companies like Xiaomi are dominating the cheap over-the-counter market. How a Fitbit / Google team will solve any of these problems is unclear. Nor will it give Google’s smartwatches a competitive and stable hardware platform that they desperately need. This business looks more like the last two companies coming together to try to survive.

Privacy and the example that Nest set

A big question about the acquisition of Fitbit, like the acquisition of Nest before it, is what Google will do with all Fitbit data. This matter was a major battleground during the EU’s investigation into the deal, and Google made some commitments to the EU to get the deal approved.

The story side of Google is explained in the blog post, with Osterloh saying, “This agreement has always been about devices, not data, and we made it clear from the start that we will protect the privacy of Fitbit users … Fitbit health data and user welfare will not be used for Google ads and this data will be separated from other Google ad data. “Google also says it will not do anything crazy with Android, like blocking all Android phones exclusively on Fitbit wearables, which apparently was something the EU was concerned about.

The EU part is here and mostly says the same thing, noting: “Google will maintain a technical separation of relevant Fitbit user data. The data will be stored in a ‘data silo’ that will be separate from any other Google data which is used for advertising. “This looks a lot like the promise of data separation Google has for Nest, where Google says it will” keep your home video images, audio recordings and sensor readings separate of advertising “. The EU also claims that Google is committed to allowing third parties to access Fitbit data through the Fitbit Web API. The duration of Google’s commitment is 10 years.

Existing Fitbit data certainly needs to be protected, and you can delete your Fitbit account here if you want to do so. Going further, however, Fitbit’s fitness tracking and Google’s Wear OS fitness tracking are so similar that Google isn’t really getting a new data stream from the Fitbit acquisition. The only new product area may be cheap Fitbit-style step counters, but Android smartphones can already do that, as can Android smartwatches. Google will gain more users thanks to the existing user base of Fitbit, but as we have already said, this is not very large, since all competitors have moved.

There is still a big question about what will happen to Fitbit accounts. If we follow the story of Nest, which only merged with Google in 2018 after a few failed years as a standalone Alphabet company, big changes are likely to come for Fitbit users. Nest users have seen the Nest account system die in favor of a forced migration to a unified Google account. This also led to the loss of the “Works with Nest” API, which broke compatibility with other devices and services. As a brand, Nest was emptied and used for the general Google smart home brand, replacing the Google Home speaker line, smart screens and Wi-Fi access points, although it is still used in original Nest products, such as thermostats, cameras and smoke detectors.

It certainly looks like Made by Google Fitbit-branded devices will arrive eventually, and Google will likely enter the cheaper fitness tracker market. This does not solve any of the problems that prevented Google from competing in wearables before. When Google and Fitbit individually could not compete with Apple, Samsung and Xiaomi, it is not clear why they think their chances would be better together.

Ars policy reporter Kate Cox contributed to this report.

List image by Fitbit