Despite Concessions, Experts Warn $2.1B Google-Fitbit Deal Risks Privacy, Competition

By Robert Bateman

The European Commission has extended its deadline for a decision on Google’s $2.1 billion acquisition of fitness-tracking company Fitbit, despite Google last week tweaking its concessions aimed at allaying European Union antitrust concerns, according to news reports.

The commission, which acts as the EU’s competition regulator, is investigating the privacy and antitrust implications of the deal. 

As a precondition of the takeover, Google has pledged that it will not use Fitbit customers’ health data to personalize online ads for 10 years. It also said it would open up its Android application processing interface (API) to competitors.

But Google last week revised the package after the commission received feedback from rivals and consumers, Reuters reports, citing “people familiar with the matter” and declining to provide further details.

The EU competition enforcer has not sought further feedback, according to Reuters, indicating the changes likely have passed muster with the commission — though the regulator extended the decision deadline to Jan. 8.

But in the absence of specifics of Google’s reported allowances, privacy experts seemed little assured of the company’s initial promise, expressing concerns about Google’s track record on consumer privacy.

“Approving the Google-Fitbit merger is a mistake,” Jan Penfrat, senior policy advisor at European Digital Rights (EDRi), told Digital Privacy News. “We have seen in the past that big tech’s promises to not abuse user data cannot be trusted.

“Selling out its users’ privacy is Google’s business model,” Penfrat added. “Giving the company access to the extremely intimate health data that Fitbit’s trackers collect would expose millions of people to that abuse.”

Google did not respond to a request for comment. The European Commission declined to comment.

However, the EU said in an Aug. 4 web post: “The commission is concerned that the proposed transaction would further entrench Google’s market position in the online advertising markets by increasing the already vast amount of data that Google could use for personalization of the ads it serves and displays.”

“This merger has direct implications for data-processing.”

Lukasz Olejnik, researcher and adviser, Brussels.

Antitrust Issues

The Fitbit deal also has raised antitrust concerns. Google’s parent company, Alphabet, based in Mountain View, Calif., reported revenues of $162 billion last year, dwarfing Fitbit’s $1.4 billion in revenues.

“Crushing or buying competitors also boosts ‘network effects’ — where users have no choice but to use the products of one dominant company because everybody else uses it, too,” Penfrat said. 

“The Googe-Fitbit merger extends Google’s already immense power into yet another market.”

Lukasz Olejnik, an independent privacy researcher and adviser in Brussels, said he believed the 10-year moratorium on the processing of health data for ads might be intended to benefit consumers.

“This merger has direct implications for data-processing,” Olejnik told Digital Privacy News. “The introduction of the 10-year delay may be seen as an option to allow the users to consider the risks and benefits.

“It isn’t clear in what way the data is to be processed in the future, so telling what will be the privacy and data-protection toll is tricky.

“But people may draw parallels with the merger of DoubleClick, which had a direct impact on web advertising,” he said.

The DoubleClick Factor

Google acquired web-marketing firm DoubleClick in 2008, despite concerns that the merger would create risks to user privacy and would allow Google to dominate the online advertising market.

Elettra Bietti, an affiliate at Harvard University’s Berkman Klein Center for Internet and Society, said she believed Google easily could break its promises to the European Commission.

“I don’t think Google would think twice about violating the moratorium,” she told Digital Privacy News. 

“A fine in the range of a few billion for violating the commitments would be nothing, compared to the huge profits Google can make through this deal.”

Bietti, based in Cambridge, Mass., argued that any promise to exclude health data from ad personalization would be infeasible.

“I don’t think Google would think twice about violating the moratorium.”

Elettra Bietti, Harvard University.

“It’s unclear how ‘health data’ can be separated from all the other data Google and Fitbit possess about persons,” Bietti said.

Such data includes “personal political and commercial preferences,” “emotional predispositions,” and “purchasing habits,” she noted.

“What we buy, say and click on the web is very connected to our health.

“No one is really consenting to the existence of these growing data-hungry business models,” Bietti added. “The ones pushing for it are the companies themselves — and they profit from them.”

For Bietti, the acquisition is another step towards a world dominated by a handful of powerful businesses.

“The way people relate to one another — the way they understand society, healthcare or politics — is almost entirely structured and mediated by private incentives,” she said. “And it doesn’t seem to be stopping.”

“By clearing the merger, the EU is denying users the ability to say ‘no,’” Bietti told Digital Privacy News. “They are forcing consumers — whether or not they are Google users — into increasing relations of dependency with a shrinking handful of global private companies.”

Robert Bateman is a writer in Brighton, U.K.

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