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Google says it’s ending its acquisition of Fitbit – uh, without DOJ approval?



Google’s senior vice president of hardware, Rick Osterloch, announced Thursday that Google has completed its acquisition of Fitbit. The $ 2.1 billion deal was announced in November 2019 and began a process of regulatory review by governments around the world concerned about Google’s impact on the Internet and the data it may collect on consumers.

Usually, Osterloch, who announces that “Google has completed the acquisition of Fitbit and I would like to personally welcome this talented team to Google,” will mean that Google has cleared its global regulatory glove. Google’s announcement today is extremely unusual, as the Ministry of Justice has not yet cleared the deal. As the Justice Department told New York Times reporter Cecilia Kang, “the Antitrust investigation into Google’s acquisition of Fitbit continues.” Australian regulators have also not announced a final decision on the merger. It seems particularly provocative for Google to do something similar while doing an antitrust inquiry into the DOJ.

Asked about the status of the DOJ merger investigation, a Google spokesman told Ars: “We have carried out an extensive review of the DOJ over the last 14 months and the agreed waiting period has expired without their objection. We continue to liaise with us and are committed to answering any additional questions. We are confident that this transaction will increase competition in the highly crowded wearable market and have made commitments that we plan to fulfill worldwide. “

However, the legal issues are being resolved, the announcement does not reveal much about Google’s future plans for Fitbit. Osterloh starts by praising Fitbit’s existing range, calling out the Fitbit Sense smartwatch, the Inspire 2 tracker and various Fitbit health indicators. Google doesn’t make cheap fitness trackers, but the company’s Google Fit app has a lot of overlap here in both smartwatches and health metrics. Google says it wants to make health and wellness more accessible to more people “and” we are confident that the combination of Fitbit’s leading technologies, product expertise and health and innovation in wellness with the best of Google’s AI, Software and hardware will lead to more competition in wearable devices and make the next generation of devices better and more affordable. ”

Fitbit CEO, President and Co-Founder James Park also has a blog post today that says, “Many of the things you know and love about Fitbit will remain the same. We will remain committed to doing the right thing, making your health easier and healthier. wellness at the heart of everything we do and offer a universal choice approach that works on both Android and iOS. “

Fitbit and Google overlap

Fossil Gen 5 LTE, a Wear OS smartwatch, announced in 2021 with the same processor as the 2014 smartwatch.
Zoom in / Fossil Gen 5 LTE, Wear OS smartwatch, announced in 2021 with the same processor as the 2014 smartwatch.

Fossilization

Google’s existing carrying platform, Wear OS, looks pretty dead. The last major update to the operating system was in 2018, and even before that, Wear OS never had a solid hardware foundation on which to build. Qualcomm – the main provider of SoC for Android – never gave Wear OS a chance, instead choosing to stifle the smartwatch platform with absolutely terrible SoC versions. Since the start of Wear OS in 2014, Qualcomm’s marketing department has created the Snapdragon 400, Wear 2100 and Wear 3100, but they are all basically a quad-core Cortex A7 SoC built on a 28 nm manufacturing process. It wasn’t until the announcement of the Wear 4100 in 2020 that Qualcomm released a wearable SoC that would be taller than the original 2014 chips.

On the other hand, Wear OS’s main competitor, the Apple Watch, has the luxury of Apple’s internal SoC division, which sees regular performance improvements each year. Apple doesn’t officially talk much about chip specifications, but says the latest Apple Watch S6 SoC is based on the A13 Bionic, and since the A13 is 7nm, it’s probably the S6 as well. As a 12-nm quad-core Cortex A53-based SoC, the Snapdragon Wear 4100 is still in no way competitive with what Apple presents, with Qualcomm promising only an 85% performance improvement over seven years ago. However, when you starve to death, everything looks like a delicious dish.

Google Fit has fallen victim to Google’s impulsiveness: the company he says it cares about a particular market, but it simply cannot keep products focused, working and well maintained in those markets. Wear OS used best-in-class weight tracking, which could automatically detect and record workout movements, but Google inexplicably killed the feature about two months ago. There used to be a Google Fit website that, like Fitbit, would present all your statistics from a big dashboard, but Google killed the Google Fit website in early 2019 after years of neglect. After all, it never supports things like Wear OS weight tracking, which launched in 2017.

The Google Fit app.
Zoom in / The Google Fit app.

Google

Neither Google Fit nor Wear OS was mentioned once in messages from Google and Fitbit on Thursday.

Fitbit is also not acquiring a helmet in the healthcare sector. While the company was at the forefront of the initial step market and could (perhaps) be seen as a valuable brand, Fitbit’s market share collapsed to single digits, thanks to increased competition. Apple is attacking it with a high-end Apple Watch, and Chinese companies like Xiaomi dominate the market for cheap step counters. It is not clear how the Fitbit / Google team will solve any of these problems. In addition, it will not give Google smartwatches a stable, competitive hardware platform that they desperately need. This deal looks more like two companies in the last place merging to try to survive.

Confidentiality and the example that Nest left

A big question about acquiring Fitbit, like acquiring Nest before it, is what Google will do with all the Fitbit data. This topic was a major battleground during the EU’s investigation into the deal, and Google made some commitments to the EU to get the deal approved.

Google’s side of history is set out in a blog post, with Osterlo saying: “This deal has always been about devices, not data, and we know from the start that we will protect the privacy of Fitbit users … Fitbit data for Health and Consumer Health will not be used for Google ads and this data will be separated from other Google ad data. “Google also says it won’t do anything crazy with Android, such as locking all Android phones exclusively to Fitbit wearables, which is obviously something the EU is worried about.

The EU part is here and mostly says the same thing, noting, “Google will support the technical division of relevant Fitbit user data. The data will be stored in a “data silo”, which will be separated from all other Google data used for advertising. “It’s a lot like Google’s promise of data sharing for Nest, where Google says it will ‘keep your videos, audio and home environment sensor readings separate from advertising.’ The EU also says Google is committed to to allow third parties to access Fitbit data through the Fitbit Web API.The duration of Google’s commitment is 10 years.

Existing Fitbit data certainly needs to be protected, and you can delete your Fitbit account here if you want to do so. For the future, however, Fitbit’s fitness tracking and Google Wear OS’s fitness tracking are so similar that Google isn’t actually getting a new stream of data since the acquisition of Fitbit. The only new product area may be cheap Fitbit-style step counters, but Android smartphones can do that now, as can Android smartwatches. Google will win more users thanks to Fitbit’s existing user base, but as we said, it’s not very big as all the competitors have moved.

There is still a big question about what will happen to Fitbit accounts. If we trace the history of Nest, which merged with Google in 2018 after several unsuccessful years as a standalone company Alphabet, major changes are likely to occur for Fitbit users. Nest users have seen that Nest’s account system has been killed in favor of forcibly migrating to a single Google Account. This also resulted in the loss of the Nest API, which compromised compatibility with other devices and services. As a brand, Nest was carved and used for the overall branding of Google Smart Home, replacing the Google Home speaker line, smart displays and Wi-Fi hotspots, while being used for genuine Nest products such as thermostats, cameras and detectors. for smoke.

It certainly looks like devices made by Google Fitbit will eventually arrive, and Google is likely to enter the cheaper fitness tracker market. However, this does not solve any of the problems that have prevented Google from competing in wearable devices. When Google and Fitbit can’t compete with Apple, Samsung and Xiaomi separately, it’s not clear why they think their chances will be better together.

Ars Policy reporter Kate Cox contributed to this report.

Image of Fitbit ad




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