Privacy advocates and lawmakers are raising concerns over Google’s $2.1 billion deal to acquire fitness tracking company Fitbit. The acquisition is an ambitious step by Google to expand the company’s footprint into wearables and health apps.
However, the deal comes amid mounting scrutiny into the tech giant’s market power and growing fears about Big Tech’s collection of health data from consumers.
Google announced the deal on Friday, and in the days since a number of consumer and privacy groups, as well as lawmakers from across the aisle, have already been pressing regulators to take a closer look.
Rep. David Cicilline (D-R.I.), who chairs the House Judiciary Subcommittee on Antitrust, said the deal threatens “to further entrench [Google’s] market power online.”
“This proposed transaction is a major test of antitrust enforcers’ will and ability to enforce the law and halt anti-competitive concentrations of economic power. It deserves an immediate and thorough investigation,” Cicilline said Friday.
Sen. Josh Hawley (R-Mo.), a fierce critic of Silicon Valley, questioned whether Google should even be allowed to go through with the deal while it is already under scrutiny.
“Why should Google be permitted to acquire even more companies while they’re under DOJ [Department of Justice] antitrust investigation,” Hawley tweeted Friday, shortly after the deal was announced.
Outside groups are also pressing for regulators to step in, with a coalition led by the Electronic Privacy Information Center (EPIC) outright urging them to nix the deal.
“There are several important reasons [to block the deal],” EPIC President Marc Rotenberg told The Hill on Monday. “This is obviously sensitive data.”
“The second is that Google’s previous representations about safeguarding user data after acquisitions are commitments they don’t keep. The third is that both the Department of Justice and the Federal Trade Commission … have indicated that it’s important to closely scrutinize mergers in the tech industry,” he continued.
Google’s deal comes with the company, and the tech industry at large, facing intense criticism from Washington over a host of issues from privacy to market power to allegations of online bias.
The Justice Department, a coalition of state attorneys general and the House Judiciary Committee have all launched investigations into digital marketplace competition with Google an important target of those probes. The plans to buy Fitbit are certain to intensify those concerns.
The deal is important for both companies as they compete in a growing consumer segment. Google has not had a significant presence in wearables compared to other companies, and Fitbit’s own position has reportedly weakened in recent years with Apple and two Chinese players taking a more dominant share.
The two companies though are pushing back on critics, noting that the deal hinges on approval from both shareholders and regulators.
“The transaction is expected to close in 2020, subject to customary closing conditions, including approval by Fitbit’s stockholders and regulatory approvals,” the companies said in their announcement.
There is a debate over how regulators are likely to approach the deal.
“The companies are really in different areas,” Joel Mitnick, a partner in the antitrust division of Cadwalader, Wickersham & Taft LLP and a former Federal Trade Commission (FTC) lawyer, told The Hill. “Fitbit has wearable fitness technology; Google doesn’t. You would look at this ordinarily as a complementary product merger.”
Google has developed a health app called Wear OS, but the tech giant has largely struggled to break into the wearables market.
But others say the deal goes to the heart of tech companies’ market dominance.
Daniel Hanley, a policy analyst at the Open Markets Institute, a think tank that has long challenged Silicon Valley, said larger companies often wait for a competitor to arise, so they can just acquire the company and its technology.
“They don’t have to do any investment, they don’t have to do anything except acquire,” Hanley continued. “Considering the kinds of acquisitions Google has done … they don’t enter these markets because they wait for a winner.”
An equally pressing concern for critics is the vast amount of health data Google would acquire in the deal. Since its founding in 2007, Fitbit products have been tracking data about consumers’ health habits and more — and the company now claims to have 28 million active users.
“This is the acquisition of a just a massive trove of data,” Emily Peterson-Cassin, a digital rights policy expert at Public Citizen, told The Hill.
“The potential of having sensitive health data from people is so exploitable that almost anything that they do with it is deeply concerning,” Peterson-Cassin added. “This is data that has a lot of potential but also carries immense risk.”
The deal also comes as Congress grapples with drafting a federal privacy law. Lawmakers have also been paying closer attention to safeguarding medical data after recent breaches.
A Google spokesperson told The Hill that the company is committed to honoring previous data privacy agreements from Fitbit and will be transparent about what data is collected with the devices. Data collected by the apps will not be used for ad targeting, and users will be able to review and delete their data, according to Google.
But privacy advocates worry that Google’s promises are not as ironclad as they sound and that the company will eventually swallow Fitbit’s consumer health data as well.
“Right now, all we’re getting from Google and Fitbit are empty promises,” Hanley said. “Tech companies are ruthless when it comes to integrating data.”
Having that data could also give Google an edge against other competitors, critics say.
“There are a lot of questions surrounding what it means when you are collecting that much data,” Peterson-Cassin continued. “Not only what does it mean for an incipient competitor, but also how do you enter the market when all the data is going in one place already?”
Google has bought companies — and their data — before, most notably when it acquired Nest Labs, which made digital home products, in 2014. Google eventually folded Nest into its own hardware division and privacy policies.
But critics note that questions about how companies handle consumer data have grown since then, particularly after a number of privacy controversies.
Rotenberg, from EPIC, expressed optimism that opponents can stop Google from going forward.
“We think they will move to block the deal and we want to encourage them to take that step,” he said of regulators.
But both Hanley and Mitnick said it is more likely the deal goes through.
“I personally don’t think anything will happen,” Hanley told The Hill about regulators stepping in.
“History has shown that the FTC and DOJ have been very permissive of these companies, they just let them run wild.”