Google Fitbit acquisition could be blocked in Australia
It has been more than a year since Google announced its intention to acquire Fitbit and it has not been a smooth ride for either company. It recently overcame one major hurdle when the European Commission finally gave its approval after much negotiations and concessions on Google’s part. The deal, however, still has to be approved in the US but even if gets the FTC’s and DOJ’s green light, it might still face some substantial fines if it goes through the acquisition without Australia’s approval.
Acquisitions and mergers are tricky things, especially when dealing with gigantic companies. Companies have to seek regulatory approval, often in multiple countries that may have different standards and requirements to fight monopolies and anti-competitive practices. That’s one of the hurdles that the Google Fitbit acquisition is now facing even after getting a reprieve in Europe.
The Australian Competition and Consumer Commission or ACCC rejected the same offer that Google made to the European Commission to address the latter’s concerns. In a nutshell, Google promised not to use the data that Fitbit harvests through its devices for Google’s advertising business. That, however, wasn’t enough for the ACCC whose primary concern is the discrimination of Fitbit’s rivals on Android devices.
The consumer watchdog presents a scenario where Google has the incentive and capability to make it harder for competing wearables and fitness trackers to work well with Android devices. It would, in other words, it could give Fitbit preferential treatment even as Google promised to keep its APIs open to other device makers.
Google could face very hefty fines in Australia if it pushes through with the acquisition without the ACCC’s approval. That said, the commission admits Australia’s own laws make it harder for it to block such mergers but it is confident that other countries’ regulators, including the US, are scrutinizing the deal as well. Google, for its part, expressed disappointment in an additional delay but says it will continue to communicate with the ACCC over those concerns.