Wearable technology is the new frontier for fashion. But not without regulation.
Australian watchdog ACCC has outlined preliminary concerns with Google’s proposed acquisition of Fitbit.
It believes that Google’s access to consumer health data may raise entry barriers, further entrench its dominant position and adversely affect competition in several digital advertising and health markets.
Fitbit, a company that makes wearable devices, has collected health information from consumers for more than 10 years, including users’ daily step counts, heart rate and sleep data.
ACCC chair Rod Sims said the issue extends to privacy and market power.
“Our concerns are that Google 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.
“The ACCC’s Digital Platforms Inquiry found that Google’s substantial market power is built on its concentration of search and location data, and data collected via third-party websites and apps."
“Past acquisitions by Google, of both start-ups and mature companies like Fitbit, have further entrenched Google’s position. The access to user data available to Google has made it so valuable to advertisers that it faces only limited competition,” Sims said.
“The ACCC’s investigation is focussed on certain online advertising services and nascent data-dependent health markets. We will explore the uniqueness and potential value that Fitbit’s data poses for Google, and its likely competitors in these advertising and health markets.”
Another key issue the ACCC has outlined in its statement of issues is whether Google is likely to favour its own wearables devices over competitors’ when supplying important related services such as WearOS, Google Maps, Google Play Store or Android smartphone interoperability.
“This is a rapidly evolving sector and, while there is inherent uncertainty about how digital markets will develop, it does not mean as a competition regulator we can conclude there will be no lessening of competition simply because the future is unclear,” Sims said.
“Our position is where there is uncertainty, especially surrounding such important markets, the ACCC must thoroughly investigate the potential for an acquisition to stymie future competition.
"As a competition regulator it is our job to weigh carefully the potential issues concerning data and advertising that may follow transactions such as these.
“We will work very closely with other competition authorities in other jurisdictions that are also reviewing this transaction.”