Google and Fitbit proudly announced yesterday that their $ 2.1 billion acquisition was completed after months of regulatory scrutiny. Unfortunately for this deal, however, it may still face legal problems, as Google did not wait for approval from the U.S. Department of Justice (DOJ) or Australian regulatory authorities before completing the purchase of Fitbit.
Between the November 2019 announcement and yesterday’s apparent close, Google faced several investigations into the deal. The most important of these came from the EU, which gave its approval in late December. The DOJ also had an investigation underway, but it never gave Google approval before yesterday’s announcement.
Ryne Hager’s Android Police to discover how Google managed to get around that. The DOJ had only a specific deadline to give its approval or disapproval to the deal, but that period passed without a final answer. As a result, Google simply went ahead due to the lack of a yes or no. At this point, it is not clear whether the US DOJ will take any legal action against Google and Fitbit.
A Google spokesman said of the DOJ investigation:
We have completed 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.
Where Google really jumped the gun was in Australia. There, the Australian Competition and Consumer Commission still had an ongoing public investigation into the deal that was due to close in March this year. The ACCC cited competition concerns as the reason for trying to block the deal, fearing that Google would “squeeze” rivals from Fitbit. Of course, that statement essentially ignored Apple’s monopoly on the iOS wearable device market.
At this point, the ACCC is investigating an “application investigation” that could result in legal action on the agreement between Fitbit and Google.
As the transaction was completed on January 14, 2021, before the ACCC had completed its investigation, this matter became an investigation into the execution of a completed merger. No further updates on the investigation will be made in this public record.
In a statement to Android Police, the ACCC further says:
“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.
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.
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