Google’s Fitbit bid on ACCC’s radar

The ACCC has put Google on formal notice it is investigating its proposed $US2.2bn Fitbit acquisition.

Authorities are concerned about the implications of Fitbit users’ personal health data being acquired by Google. Picture: Supplied.

The Australian Competition and Consumer Commission is worried Google will use its proposed $US2.2bn ($3.2bn) acquisition of fitness tracking company Fitbit to deliver targeted health ads, with the regulator’s boss Rod Sims unconvinced by the promises made so far by both companies.

Speaking to The Australian at a Consumer Policy Research Centre event on Tuesday, Mr Sims said the implications of acquisitions made by the likes of Google and Facebook need to be carefully considered.

“If you go back to Facebook’s takeover of Instagram you could have envisaged what that was about, but back then the two businesses were seen as being different to each other, so working out what happens post-merger was tricky.”

“That’s the same issue here with the Google and Fitbit deal.”

The ACCC has launched a Federal Court action against Google alleging false and misleading claims over the use of its location data.

Mr Sims’s comments were backed by eSafety Commissioner Julie Inman Grant who said that the tech giants have managed to secure major mergers in the past with limited scrutiny.

“I can’t believe how little scrutiny there was around Facebook acquiring Instagram, then buying WhatsApp, and then acquiring Oculus.”

“They just went on a massive buying spree and we probably have this sprawling challenge if regulators were more mindful.”

“The US regulators have probably wanted to be hands-off because these companies are the engine rooms of the US economy but what you do end up with the oligopoly of these very powerful companies,” Ms Inman Grant told The Australian.

Mr Sims added that the Google-Fitbit deal once again highlighted the dangers of consumers losing control of their data when companies are sold or merged.

“While parties frequently claim that they don’t have the incentive or ability to combine data sets, history tells us that incentives and ability can and do change, often over a relatively short period of time,” he said in his speech at the CPRC event.

Google and Fitbit have indicated that user health and wellbeing data will not be used for Google Ads, however, Mr Sims said there was no guarantee that will be the case in the future.

“At the time of Google’s acquisition of DoubleClick, DoubleClick reportedly denied that the data it collects through its system for serving ads would be combined with Google’s search data.”

“Eight years later, Google updated its privacy policy and removed a commitment not to combine Doubleclick data with personally identifiable data held by Google.”

“Given the prior history I have just mentioned, it is a stretch to believe that commitment will still be in place five years from now,” Mr Sims said.

The ACCC has launched a Federal Court action against Google alleging false and misleading claims over the use of its location data.The move comes as the federal government finalises its response to the ACCC platforms inquiry report which is pushing for more action against Google and Facebook including a code of conduct.

Mr Sims said on Tuesday that robust regulation was the only way to cut the tech giants down to size.

According to Mr Sims, the technology giants are not taking enough responsibility for their actions, only acting when they are hit by fines and legislation.

“In our recent Inquiry the ACCC found that few consumers are fully informed of, nor can they effectively control, how their data is collected, used and shared by digital platforms.”

“Concerted pressure produces change, and that change also emphasises the need to maintain the pressure,” he said.

CPRC chief executive Lauren Solomon warned that consumers were increasingly signing up to an “unfair bargain”.

According to Ms Solomon, navigating the internet today requires consumers to hand over significant amounts of personal information to gain access to basic products and services.

“Consumers are no longer just purchasers of products and services, we’re also now suppliers of data and information,” she said in her speech at the event.