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The acquisition of Fitbit by Google is now complete, according to an announcement made by the company earlier this morning. Claiming that the deal has always been about Fitbit’s hardware expertise and not customer data, Google says it has eased regulatory concerns with a number of safeguards and commitments. However, we are not sure whether the concerns of US or Australian regulators have really been addressed, given the ongoing state of both investigations.
Google secured the European Commission’s approval in December for the long-awaited $ 2.1 billion deal. However, there were some conditions associated with it, all of which appear to have been addressed based on the Google ad. In short, Google needs to keep Fitbit user data separate, where it cannot be used for things like advertising, and third party access to existing Fitbit web APIs must be maintained. Nor can Google give Fitbit an unfair advantage in the Android wear market or give other companies an indirect handicap by creating new closed APIs, etc.
On paper, this would appear to end the merger, which we had hoped to happen since it was announced in November 2019, but there are two possible hiccups.
One, the Australian Competition and Consumer Commission, raised its own objections to the deal just a few weeks ago, claiming that its investigation would not be complete until March 25. You don’t have to be a horologist to read today’s calendar and see that today (that is, January 14) is just before that. When asked about Google’s announcement that the merger was “complete”, the ACCC provided us with an extra large statement, claiming that things were escalated due to Google’s action in an “application investigation”, which may be subject to legal action. . Excerpts for choosing the superlong declaration are included below:
The ACCC will continue to investigate the acquisition of Fitbit, Inc (Fitbit) by Google LLC (Google), which has now been completed despite ACCC’s ongoing public review of the transaction.
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“Google’s decision to complete the acquisition of Fitbit before we completed our analysis of the merger means that we are now conducting an execution investigation. As a result, and depending on the results of our investigation, we will consider whether we should take legal action on this matter, ”said Rod Sims, president of the ACCC.
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In December, the ACCC decided that it would not accept a long-term behavioral commitment offered by Google, which sought to resolve competition issues due to significant difficulties in effectively monitoring and enforcing the commitment.
As this is now a completed acquisition, the ACCC will remove this matter from its informal public merger registry. The investigation, therefore, will no longer have a scheduled decision date. “
Second, it looks like Google Besides that failed to obtain approval from the U.S. Department of Justice for the merger, too. Deputy Attorney General Alex Okuliar tells us:
“The Antitrust Division’s investigation into Google’s acquisition of Fitbit is still ongoing. Although the Division has not reached a final decision on whether to pursue enforcement action, the Division continues to investigate whether Google’s acquisition of Fitbit could harm competition and consumers in the United States. The Division remains committed to conducting this review as completely, efficiently and quickly as possible. ”
However, a Google representative states that this is not the case and that did obtain implicit approval after a waiting period expires:
“We followed the DOJ’s extensive review over the past 14 months, and the agreed waiting period has expired without objection. We remain in contact with them 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. “
Google’s acquisition of Fitbit has been under review since 2019 and the DoJ has yet to publicly state the results of the investigation. This may be due to the general scope of their investigations against Google, or perhaps Trump’s DoJ simply did not renew or extend this waiting period, implicitly granting approval for the merger by failing to meet the previously imposed deadline. (We are not familiar with the process here, and the DoJ does not appear to have released these details that we can find.) We contacted the U.S. Department of Justice for more information and pointed out the discrepancy to Google as well; we will update if we hear more. We have also contacted the Australian ACCC for more information.
Recently, Fitbit wearables have acquired some Googly features, such as the Assistant integration, and Google has been building deeper integration for wearables as well, such as with the Assistant’s new Wellness section. Even before the merger was “complete”, both Google and Fitbit were working towards it, and the company’s recent dressing accessories were well evaluated. If this trend continues, it could mean better wearables for consumers, just as the global market is about to explode.
Between Australia and the United States, however, it appears that Google has rushed in announcing the end of the merger. Perhaps the company is trying to convince regulatory agencies to approve prematurely, although this is probably not a wise move in the midst of so many antitrust investigations.
Google may also not have obtained approval from the United States Department of Justice, as all signs indicate that the regulatory agency’s investigation is ongoing. Our coverage has been updated with the statement that the DoJ has provided some points of sale and a statement from Google about the end of the DoJ waiting period itself.
The ACCC also informs us that its investigation is ongoing and that this decision to complete the merger before the review is made has turned it into an “application investigation”, with the potential for legal action. We contacted Google to hear your thoughts on this development, but we still haven’t received a response at the time of writing.