For months, Google has been trying to acquire Fitbit, the San Francisco company that specializes in wearable technology devices. Regulators have raised some concerns over privacy issues, which has forced the acquisition to go under a second review by the Justice Department. The purchase would be worth $2.1 billion if it goes through, but if Google is forced to pull out, it will have to pay Fitbit a termination fee of $250 million.
There is ambiguity about how Google will be using the health data it will receive through Fitbit. There are currently 28 million Fitbit users and Google has not been able to clarify what its plans are for these data. The tech giant did claim it would not use personal data for targeted advertising, but failed to explain further.
The Justice Department (DOJ) has been trying to pinpoint a motive for this acquisition. If the motivation for the acquisition is not for the health data, an alternative theory is that Google hasn’t been able to compete in the wearable technology market. Apple, with it’s Apple Watch, dominates the field, but with Fitbit’s technology, Google might be able to successfully compete in that market. The ambiguity comes because Google has been trying to push into the health field as well.
The head of the DOJ’s antitrust division, Assistant Attorney General Makan Delrahim, has removed himself from the case due to his past as a lobbyist for Google. Attorney General William Barr has taken over and has already doled out civil investigative demands to both firms. This is just one of several open cases the DOJ has with Google. It’s also investigating their advertising, search and Android departments. The outcome remains unclear.