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Attempts to block Google's acquisition of Fitbit over health privacy

By Shannon Williams
Tue 10 Nov 2020
FYI, this story is more than a year old

Monash Business School has presented research to to the European Commission and the ACCC in an attempt to stop Google's planned acquisition of Fitbit. 

Researchers argue that Google could monetise the health data of more than 28 million Fitbit users. Should it proceed, the acquisition deal is worth close to AUD$3 billion.

Google announced its intent to purchase the US-based fitness company in November 2019 for USD$2.1 billion. This would give Google ownership of Fitbit and the health data it holds on roughly 28 million people worldwide.

Before the end of the year, European antitrust regulators, along with the ACCC, will decide whether to grant Google permission for its planned acquisition.

However, a group of economists from Monash University found this proposal concerning enough to speak out against it.

Professor Chongwoo Choe, director of the Centre for Global Business (CGB), and associate professor Zhijun Chen, a coordinator for CGBs Digital Economy Research Network, joined with a number of the world's top competition economists to prepare an amicus brief to the European Competition Authority in the hope they could raise the alarm on behalf of unsuspecting global consumers.

Sensitive health data held by Fitbit can be added to a users' personal profile Google aggregates from its other services, such as emails, maps and online searches, Choe says.

"While Google says it would not use Fitbit data for advertising purposes, this doesn't rule out Google's use of this data in other markets, such as health care."

Associate Professor Chen said Google's bid for Fitbit is consistent with its strategy to expand into health care, life sciences and insurance.

"By connecting Fitbit data with user data from Google's Cloud Healthcare API, Google can build a more comprehensive patient profile and offer more personalised health care," he says.

In their paper titled: Data-driven mergers and personalisation, the researchers argue that, on one hand, access to richer sets of data can enable firms to tailor their products and service offerings in a more personalised way.

On the other hand, enhanced personalisation and better targeting strategies can increase the firms capacity to engage in price discrimination and consumer exploitation.

This paper was included as key evidence in the submission to the European Commission and was presented to the ACCC for the case team reviewing the Google-Fitbit case.

"We also need to worry about incentives to pre-empt competition that could threaten Googles data collection dominance", says Choe.

"As the consensus is now firmly that preventing bad mergers is a key tool for competition policy vis--vis acquisitive digital platforms, the European Commission and other authorities should be very sceptical of this deal, and realistic about their limited ability to design, impose and monitor appropriate remedies."

Associate Professor Chen says Googles ambition is to protect its unique data empire, integrate functionalities, and monetise information through its expanding digital arms.

"This is evidenced through the Google Workspace (formerly G Suite) with a number of its popular free services Gmail, Calendar, Maps, Chrome and News. Revenue from these platforms wasnt directly sourced from the sale of advertisements, but through the collection of consumer demographic, interest and location data to better target advertisement placement.

"The Fitbit merger provides the chance for the European Commission and the ACCC to remain a frontrunner in the enforcement and guidance of merger policy in the digital era."

Choe says Google's proposed acquisition of Fitbit is not just about a gadget being brought into Googles ecosystem, but one that involves highly sensitive data that is likely to harm consumers in health insurance, medical services, and even labour markets.

"All too often, academics and policymakers look back and lament a failure to intervene more decisively and bemoan their hopeful reliance on remedies that just don;t work," he says. 

"Blocking the merger doesn't solve all problems related to health data, but it avoids amplifying already existing problems."

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