Tech giant Google officially announced Thursday that it has taken over the fitness company Fitbit for $2.1 billion. However, since Google generates most of its revenue by selling ads based on users’ data, there have been privacy concerns from regulatory authorities around the world. The acquisition is still under investigation in the US and Australia.
Google’s Long Journey For Acquiring Fitbit
Google’s parent company Alphabet first disclosed its acquisition plan in November 2019 in a move to capture a share of the smartwatch market. The deal has been subject to strong concerns by regulators regarding data and privacy since then.
The leading search engine entered into several commitments in Europe and other countries, promising that it won’t use the health data collected from Fitbit to further drive the sales of ads. It also pledged to allow access to third-party wearables to all of the same Android APIs as its own devices, including any additions made, for the next ten years.
Fitbit & Data Collection
The fitness tracker was launched in 2007 and has sold over 120 million devices in more than 100 countries since then. It has over 29 million actives users today.
Fitbit gathers user data including steps, calories burned, floors climbed, heart rate, and sleep duration. Google reiterated that a technical separation will be maintained between Google’s user data and Fitbit’s user data. It pointed out that users will have an “effective” choice to deny Google’s other services from having access to their health data.
Rick Osterloh, Google’s senior vice president for devices and services, said that the acquisition was about the devices and not the data. Google insisted that the purpose of acquiring Fitbit was to expand its portfolio of internet-connected products which includes smartphones, laptops, speakers, cameras, and thermostats.
The US Department of Justice (DOJ) is investigating the acquisition with respect to its effect on competition and consumers in the US.
Can Google Gain Market Share By Fitbit’s Takeover?
The smartwatch market is predominantly led by Apple. Google’s Wear OS has failed to make a significant impact on the market. By acquiring Fitbit, which already owns a significant share of the market, Google could expand in the smartwatch market by using its resources and platform. However, the success would only be possible if Google stays true to its word.
Previously, Google’s DeepMind team collected data of 1.6 million UK patients without their consent. DeepMind had pledged that it would not merge information with Google. Yet the data was used for building an artificial-intelligence-power assistant for nurses and doctors.