ACCC concerned over Google's potential acquisition of Fitbit

The ACCC has expressed concern over Google’s proposed acquisition of Fitbit, claiming the firm’s access to consumer health data may give it unfair market dominance and cause entry barriers for start-ups.

Ultimately, these issues could stunt competition in several digital advertising and health markets, it argued, drawing on findings of its Digital Platforms Inquiry.

“Our concerns are that Google buying Fitbit will allow Google to build an even more comprehensive set of user data, further cementing its position and raising barriers to entry to potential rivals,” ACCC Chair Rod Sims said in a statement.

“[Our] Inquiry found that Google’s substantial market power is built on its concentration of search and location data, and data collected via third-party websites and apps.

“The access to user data available to Google has made it so valuable to advertisers that it faces only limited competition.

“Past acquisitions by Google, of both start-ups and mature companies like Fitbit, have further entrenched Google’s position.”

The ACCC’s investigation is focused on online advertising services and nascent, data-dependent health markets.

Sims said further research need to be done on the unique data held by Fitbit — a company that owns 10 years’ worth of consumer information including daily step counts, sleep data and heart rate.

“We will explore the uniqueness and potential value that Fitbit’s data poses for Google, and its likely competitors in these advertising and health markets,” he said.

A secondary issue is that Google is likely to favour its own wearables devices over competitors’ when supplying important related services such as WearOS, Google Maps, Google Play Store or Android smartphone interoperability.

“This is a rapidly evolving sector and, while there is inherent uncertainty about how digital markets will develop, it does not mean as a competition regulator we can conclude there will be no lessening of competition simply because the future is unclear,” Sims said.

“Our position is where there is uncertainty, especially surrounding such important markets, the ACCC must thoroughly investigate the potential for an acquisition to stymie future competition. As a competition regulator it is our job to weigh carefully the potential issues concerning data and advertising that may follow transactions such as these.

“We will work very closely with other competition authorities in other jurisdictions that are also reviewing this transaction.”

Image credit: ©stock.adobe.com/au/David Prahl