Google has paid 2.1 billion dollars (1.89 billion euros) for Fitbit, the maker of fitness trackers. Why does Google want to get Fitbit? And does the acquisition affect users' health data?
What is going on?
Google announced in November 2019 that it wants to acquire Fitbit. With the acquisition, Google enters the market for smartwatches and fitness trackers. With that, the company competes with Samsung, Apple, Garmin and Xiaomi, among others.
But there are questions about what this acquisition means for Fitbit users' health data. The European Commission (EC) has therefore launched an official investigation. The research specifically focuses on concerns that Google may use Fitbit health data for personalized ads, even though Google has pledged not to.
According to the EC, Google is gaining an important advantage in the online advertising market with the health data from Fitbit devices. Google already has a dominant market position in this area, and if Google were to use health data to personalize ads, it would be even more difficult for competing companies to offer a comparable advertising service. Then they can hardly compete with Google anymore.
Fitbit's fitness trackers store information about the health and activities of users. (Photo: Fitbit)
How will the acquisition affect my health data?
The Fitbit devices store a lot of data from users, such as their age, weight, heart rate, how many steps they took in a day, how they slept last night and so on. That data is very useful, because it can help you as a Fitbit user to exercise, live a healthy life or achieve goals.
But when taken over by Google, these health data would therefore fall into the hands of the tech giant. Privacy watchdogs rang the bell earlier this year because they fear that Google will receive too much data about its users. Google already has a lot of data from users at its disposal, this health data would then also be added.
What does that have to do with advertisements?
Google already uses user data to be able to offer personalized advertisements. If a user is logged into their Google account and, for example, visits a travel website on their computer at work, they can see ads on their phones for flights to Paris in the evening.
Privacy watchdogs are concerned that the health data from Fitbit devices will also be used to target Google ads to specific individuals. For example, using the Fitbit data, Google could see that you have not been exercising for two months, and can then show you advertisements from gyms. Or could Google see your BMI is a bit high and show you diet book ads.
According to market researcher International Data Corporation (IDC) 2019, Apple was by far the largest player in the wearables market, followed by Xiaomi and Samsung. The company behind the Apple Watch owned nearly 32 percent of the market. (Photo: Kieskeurig.nl)
According to the European Commission, data collected through wearables, such as fitness trackers, provides an important advantage in the online advertising market. "This could hinder competition in the advertising market," said the EC. "Which would ultimately come at the expense of advertisers and publishers who would face fewer opportunities and higher prices."
The European consumer organization BEUC already warned in May in a report about the possible consequences for consumers. The takeover "may damage innovation and consumer choice in different markets". Not only competitors in the advertising market are affected, but consumers are also noticing the consequences. If fewer companies enter the market, the consumer also has fewer companies to choose from.
See also: This is why you will see advertisements targeted at you online
What does Google say about this itself?
Google promised not to use health data for Google ads as of the announcement of the acquisition. According to Google, the acquisition is "about devices, not data."
In August, the company backed up the pledge by saying it was willing to make legally binding agreements on this: "We've made it clear from the start that we're not using Fitbit users' health data for Google ads. We recently suggested a legal make a binding commitment to the European Commission on the use of Fitbit data. "
Google argues that the acquisition of Fitbit is good for the market for smartwatches and fitness trackers. The company mentions the brands Apple, Samsung, Garmin, Fossil, Huawei and Xiaomi and says that adding "the combination of Google and Fitbit's hardware efforts leads to an increase in competition".
The European Commission will decide by 9 December 2020 whether the acquisition of Fitbit can continue.