Google Face Tough Time Getting US$2.1 Billion Fitbit Deal Approved
As expected, Google has acquired Fitbit for US$2.1 Billion however the deal is set to come under scrutiny as US lawmaker claim that the deal will allow Google to not only track owners of Fitbit products but sell the data, they collect from the Fitbit devices.
US politicians believe that the acquisition of Fitbit is fraught with dangers for Fitbit wearable owners.
Bloomberg said that Google’s $2.1 billion acquisition of Fitbit means two of the largest technology companies now dominate the U.S. market for fitness tracking devices and data, and the purchase is already coming under fire from U.S. lawmakers.
“Why should Google be permitted to acquire even more companies while they’re under DOJ antitrust investigation?” Josh Hawley, a Republican U.S. senator from Missouri, said on Twitter referring to the Justice Department.
Representative David Cicilline, who heads the House antitrust investigation into the big tech companies, also criticized the deal.
“Google is signalling that it will continue to flex and expand its power in spite of this immense scrutiny,” said Cicilline, a Democrat from Rhode Island. “Google’s proposed acquisition of Fitbit would also give the company deep insights into a consumers most sensitive information — such as their health and location data — threatening to further entrench its market power online.”
The acquisition is expected to close sometime in 2020, Fitbit said with both Companies expecting a tough time trying to gain antitrust clearance.
If the deal fails to go through Google will have to cough up $250 million to Fitbit.
In the current political climate, regulators will take a very close look, said Joel Mitnick, a partner in the antitrust division of Cadwalader, Wickersham & Taft LLP and a former Federal Trade Commission lawyer.
“Any proposed transaction is likely to get attention from the antitrust enforcement agencies with a high likelihood of a second request even though the proposed transactions may have no antitrust implications,” Mitnick said.