The Australian Competition and Consumer Commission (ACCC) has decided not to accept a long-term behavioural undertaking offered by Google that sought to address competition concerns about its planned purchase of wearables supplier and manufacturer Fitbit. The ACCC reports that it will continue its investigation into Google’s proposed acquisition of Fitbit and plans to release a new decision on 25 March 2021.
According to ACCC chair Rod Sims, the Commission continues to have concerns that Google’s acquisition of Fitbit may result in Fitbit’s rivals, other than Apple, being “squeezed out of the wearables market, as they are reliant on Google’s Android system and other Google services to make their devices work effectively.
The ACCC also believes the proposed acquisition also consolidates Google’s leading position in relation to the collection of user data, which supports its significant market power in online advertising and is likely to have applications in health markets.
The Commission is also continuing to investigate the acquisition’s potential impact on wearable operating systems. The acquisition may result in Google becoming the default provider of wearable operating systems for non-Apple devices and give it the ability to be a gatekeeper for wearables data, similar to the position it holds for smartphones which licence the Android operating system, Sims also said.
Google sought to address the ACCC’s competition concerns by offering a court enforceable undertaking that it would behave in certain ways towards rival wearable manufacturers, not use health data for advertising and, in some circumstances, allow competing businesses access to health and fitness data.
“While we are aware that the European Commission recently accepted a similar undertaking from Google, we are not satisfied that a long term behavioural undertaking of this type in such a complex and dynamic industry could be effectively monitored and enforced in Australia”, Sims added.
The proposed acquisition has received conditional clearance in Europe, but several other competition authorities, including the US Department of Justice, are still expected to release their decision.
The ACCC plans to continue to work with overseas agencies on these competition issues.
