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Australian regulator threatens to block Google's Fitbit takeover

Google says it will continue to engage with the regulator to answer their questions.

What you need to know

  • The Australian Competition and Consumer Commission has threatened to slap Google with a $400 million fine if it completes the Fitbit acquisition before the regulator completes its investigation.
  • The regulator has rejected Google's offer to enter into a court-enforceable undertaking that would limit the way it would use data from Fitbit devices.
  • While the EU has approved Google's Fitbit acquisition, the U.S. Justice Department is expected to rule on the deal sometime early next year.

After a thorough antitrust investigation, the EU finally approved Google's Fitbit acquisition last week. However, the deal could soon face a new roadblock, as the Australian Competition and Consumer Commission has threatened to use legal powers to block the deal if Google takes over the wearable maker before it completes its investigation. In case it fails to block the deal, the regulator would bring legal action for breaching competition law, which would mean Google will have to pay up to $400 million in fine.

The Australian antitrust regulator has rejected a court-enforceable undertaking offered by Google, limiting the way it would use health data from Fitbit devices for advertising. ACCC chairperson Rod Sims has said that it will continue investigating the transaction and expects to make a decision by March 25.

The ACCC is worried about "what's termed vertical foreclosure, which means that Google may have the incentive, and the ability, to harm competitors if it gets hold of Fitbit just by making it harder for them to interfere with Android devices. Speaking to The Guardian, Sims said:

It could, as I say, have the ability and incentive to discriminate against other players and so the result of that would be you'd have in wearables an Apple device and an Android device – you get the same duopoly that you've got in apps, for example, and you've got in mobile.

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