Fitbit Gets A New Owner

   Earlier this month, Google Inc. finally completed acquisition of Fitbit for USD 2.1 billion. Fitbit is a 12-year-old company which single handedly revolutionized the wearable tech industry. Google has been aggressively planning to foray into the wearable technology spectrum.

   This deal was the first of many major decisions they are going to take to launch their first smart watch to compete with their competitor Apple which currently dominates more two-third of the smartwatch market. The decision of acquiring Fitbit is of great significance for Google as they somewhat lacked the hardware capabilities to develop a smartwatch. 

   Technology experts are concerned about the fact that following this deal, would be the transfer of sensitive data to Google that belongs to millions of Fitbit users. They predict that this data would be used by Google for target marketing and generating personalized ads pertaining to people’s health preferences. Fitbit users are enrolled in the Fitbit Wellness Program and if Google uses their health data to create ads, it will violate privacy laws of various countries.

   Google has taken a very hands-off approach to this matter to avoid any more scrutiny than it already does by the regulators. Google’s hardware chief Rick Osterloh announced that Google would not use sensitive health data of Fitbit consumers and its future smartwatch buyers to generate personalized ads. It would only be used to create a seamless integration and connectivity between the user, the smartwatch, and other mobile and home devices.

   Through acquisition of Fitbit and Fossil’s intellectual property and technology, Google is strengthening its plan to succeed in the wearable devices market. However, the Fitbit deal brings with it, its fair share of scrutiny towards Google. Google is already under tremendous scrutiny by regulators. Almost all the states in the U.S. are investigating Google for antitrust and invasive competitive tactics. European Union recently fined Google USD 1.7 billion for dominating the online advertising market through imposing contractual limitations on websites such as not including advertisements from its competitors. Experts say that Google is an advertising firm at its core as 80 percent of its revenue is generated through ads. This raises speculations as users believe that Google would use their sensitive health data to generate personalized ads.  

   Fitbit is currently struggling in the market due to competition from Apple. Following the announcement of the deal back in November 2019, Fitbit’s shares shot up by 30% and their market capital increased by USD 340 million as compared to previous day. The deal could give Fitbit the required software superiority over its competitors as Google has abundant software resources.

   Google acquired Fitbit in line with its plan of venturing into the smartwatch market. It is a pioneer in software but lacks the hardware capabilities for developing a smartwatch. It plans to benefit from Fitbit’s know-how of the market and customer base. The deal brings its fair share of concerns for both the companies as Google is under a lot of scrutiny for their invasive market dominance techniques and data privacy issues.