Consumer groups warn Google's Fitbit buyout could harm data privacy, competition

Consumer groups are urging regulators to scrutinize Google's $2.1 billion bid for Fitbit, citing privacy and competition concerns.

"This will be a test case for how regulators address the immense power the tech giants exert over the digital economy and their ability to expand their ecosystems unchecked," a group of 20 consumer organizations wrote in a statement sent to antitrust authorities in the U.S., the U.K., Canada, Australia and several other jurisdictions.

Google announced in November its plans to buy the fitness tracking company to bolster its wearable capabilities.

At the time of the announcement, Google's senior vice president of devices and services Rick Osterloh said the tech giant plans to leverage Fitbit's capabilities to bring together the "best hardware, software, and AI to build wearables to help even more people around the world."

Fitbit and Google executives said strong privacy and security guidelines will continue to be a major priority.

EU regulators have until July 20 to decide whether to clear the acquisition.

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The group behind the letter includes Open Markets Institute, Omidyar Network, Center for Digital Democracy, Open Knowledge and Public Citizen in the U.S. along with the Open Society European Policy Institute and Access Now in the EU.

The Google-Fitbit merger is a "test of regulators’ resolve to analyze the effects on competition of a tech giant acquiring a vast amount of highly valuable data through a takeover," the groups said in the statement.

The consumer groups are urging regulators to be wary, highlighting concerns that Google could exploit Fitbit’s "exceptionally valuable health and location datasets, and data collection capabilities" to strengthen its already dominant position in digital markets such as online advertising.

"Google could also use Fitbit’s data to establish a commanding position in digital and related health markets, depriving competitors of the ability to compete effectively. This would reduce consumer welfare, including degrading data privacy options, limit innovation and raise prices," the groups said.

Regulators must assume that Google will in practice utilize the entirety of Fitbit’s unique, highly sensitive data set in combination with its own, particularly as this could increase its profits, or regulators should impose strict and enforceable limitations on data use, the groups said.

Wearable devices could soon replace smartphones as the main gateway to the internet, and the tech giant's expansion into the market, edging out other competitors, would be significant, the consumer groups said.

Fitbit collects data on millions of users including how many steps they take daily, the quality of their sleep and their heart rates.

Wearables like Fitbit’s could give companies details of essentially everything consumers do 24/7 and allow them to feed digital services back to consumers, the groups said.

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A Google spokesperson said the deal to acquire Fitbit is about "devices, not data."

"The wearables space is highly crowded, and we believe the combination of Google's and Fitbit's hardware efforts will increase competition in the sector, benefiting consumers and making the next generation of devices better and more affordable," the spokesperson said in an emailed statement.

Fitbit did not respond to a request for comment.

Google is already under scrutiny by U.S. regulators in a broader antitrust probe of the search and advertising markets.

The acquisition of Fitbit could expand Google’s immense power in digital markets into the global healthcare market, where it already is making significant inroads.

Australia’s antitrust regulator has already voiced concerns about the deal.

In a preliminary decision, the Australian Competition and Consumer Commission warned Google’s acquisition of Fitbit may give it too much of people’s data, potentially hurting competition in health and online advertising markets, Reuters reported.