[Update: DoJ Investigation continues] Google completes Fitbit buyout after months of scrutiny

Google has confirmed that its buyout of wearables maker Fitbit has completed, bringing to an end 13 months of investigations in the US and European Union. The deal is said to have cost Google $2.1bn, where it will sit as a Google subsidiary, not an Alphabet division.

The biggest prize for Google is the estimated 29m Fitbit users it has acquired as part of the deal, however, under EU scrutiny, it was decided that this data must be kept completely separated from the main Google databases.

Rick Osterloh said in his announcement: “Technology can change the way people manage their health and wellness, and that’s especially important these days. We’ll work closely to create new devices and services that help you enhance your knowledge, success, health and happiness. Your privacy and security are paramount to achieving this and we are committed to protecting your health information and putting you in control of your data.” adding “This deal has always been about devices, not data”.

The deal had cleared US Department of Justice scrutiny, but a full probe by EU officials was only completed less than a month ago and came with caveats including the aforementioned data separation which means that Google will not be able to target advertising through Fitbit data. It has also agreed to maintain all APIs and third-party connections, so Fitbit users cannot be tied to the Google ecosystem.

Fitbit’s CEO James Park wrote to customers on the announcement, assuring them, “[I] want you to know that many of the things you know and love about Fitbit will remain the same. We’ll stay committed to doing what’s right, to putting your health and wellness at the center of everything we do and to offering a no-one-size-fits-all approach with choices that work across both Android and iOS.”

It’s not entirely clear what, if anything, Fitbit and Google will be able to produce as a joint venture, under the limitations set out by regulators, but now the deal has been officially closed, we can expect to get more details in the coming months.

Update: Google-Fitbit deal still under scrutiny

While Google has gone ahead and completed its acquisition of Fitbit, the US Department of Justice maintains that it has not given a formal clearance to the deal and it is still under scrutiny.

Google said it finalized its Fitbit acquisition. But @JusticeATR says they didn’t give them the ok. “The Antitrust Division’s investigation of Google’s acquisition of Fitbit remains ongoing. /1

— Leah AntiTrustButVer1fy Nylen (@leah_nylen) January 14, 2021

How could Google go ahead even if they do not have approval? They legally can, actually. According to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, deals can proceed if no official objection is received from the Department of Justice during the waiting period. Google completed the waiting period, and is thus within its rights to close the deal. On the same lines, the Department of Justice can also maintain its investigation post the waiting period. It is unusual for regulators to undo a transaction after the waiting period, but there is a certain risk that it might happen, but it seems that Google wants to persevere.