Google Warned Against Fitbit Acquisition

Leading online search engine Google has been warned by Australian Competition and Consumer Commission (ACCC) against its planned move of acquiring San Francisco based fitness tracker maker Fitbit Inc. (FIT).

According to the regulator, this deal might hurt healthy competition in health and online advertising markets in addition, it will end up giving Google a lot of user personal data which is very risky.

The Australia’s antitrust regulator goes down as the first regulator to voice its input regarding this $2.1 billion deal. This comes at a time when Alphabet Inc. (GOOGL) is experiencing some wrangles with the Australia’s regulator concerning how the tech company handles personal user data.

“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,” said ACCC chairman, Rod Sims.

Sims says user data on Google platforms suggests monopoly and if the trend continues it will pose some unhealthy competition among other peers in the market. “User data available to Google has made it so valuable to advertisers that it faces only limited competition,” said the chairman.

On the receiving end, Google says it wants to capitalize on this acquisition so as to be in a better position to compete with industry peers including Samsung Electronics. (005930) and Apple Inc. (AAPL) in manufacturing smart watches and fitness trackers.

ACCC does not possess any authority to block any deal outside the Australia borders, however, multiple consumer groups are pushing U.S regulators to scrutinize the deal meticulously giving special care to concerns of users’ private data raised.

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