Google says it shuts down Fitbit acquisition – uh, without DOJ approval?

Google’s senior VP of hardware, Rick Osterloh, announced on Thursday that Google has closed its acquisition of Fitbit. The $ 2.1 billion deal was announced in November 2019 and has begun a regulatory process by governments around the world over Google’s impact on the Internet and the data it can collect on users.

Normally, Osterloh will announce that ‘Google has completed the acquisition of Fitbit, and I would like to personally welcome this talented team to Google’, means that Google has cleared its global regulatory glove. Google’s announcement today is extremely unusual, as the Justice Department has not yet approved the deal. As the DOJ told the New York Times Cecilia Kang“The Antitrust Division’s investigation into Google’s acquisition of Fitbit continues.” Australian regulators have also not announced a final decision on the merger. It seems particularly challenging for Google to do something like this while also dealing with a DOJ antitrust investigation.

Asked about the status of the DOJ’s merger investigation, a Google spokesman told Ars: “We have complied with the DOJ’s extensive review over the past 14 months, and the agreed waiting period has expired without their objection. We “We remain committed to contacting them and we are committed to answering additional questions. We are confident that this agreement will increase competition in the very high-pressure market, and we have entered into commitments that we plan to implement worldwide.”

However, how the legal issues work out, the announcement does not give much away from Google’s future plans for Fitbit. Osterloh begins by praising Fitbit’s existing range, citing the Fitbit Sense smartwatch, the Inspire 2 tracker and various Fitbit health statistics. Google does not make cheap fitness trackers, but the company’s Google Fit app has a lot of overlap here in both smartwatches and health statistics. Google wants to ‘make health and wellness more accessible to more people’ and ‘we are confident that combining Fitbit’s cutting-edge technology, product expertise and health and wellness innovation with the best of Google’s AI, software and hardware will create more competition. portable and makes next-generation devices better and more affordable. ‘

James Park, CEO, President and Co-Founder of Fitbit, also posted a blog post today in which he says: “Many of the things you know about Fitbit and that you love will remain the same. is, to put your health and wellness at the heart of everything we do, and to provide a one-time approach with choices that work in Android and iOS. ‘

The Fitbit and Google overlap

Google’s existing portable 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 base to build on. Qualcomm – Android’s primary SoC provider – never gave Wear OS a chance, but rather chose to suffocate the smartwatch platform with absolutely awful SoC releases. Since the launch of Wear OS in 2014, Qualcomm’s marketing division has created the Snapdragon 400, Wear 2100 and Wear 3100, but at their heart, they’re all a four-core Cortex A7 SoC, built on a 28 nm manufacturing process. Only in the announcement of Wear 4100 in 2020, Qualcomm released a portable SoC that is higher than the original 2014 chips.

On the other hand, Wear OS’s primary competition, the Apple Watch, has the luxury of Apple’s in-house SoC division, which regularly sees performance improvements every year. Apple does not officially talk much about disk specifications, but it does say the latest Apple Watch S6 SoC is based on the A13 Bionic, and since the A13 is 7 nm, the S6 probably is too. As a 12 nm square-core Cortex A53-based SoC, the Snapdragon Wear 4100 is still by no means competitive with what Apple puts out, and Qualcomm promises only an 85 percent improvement in performance compared to seven years ago. However, if you are hungry, everything looks like a delicious meal.

Google Fit falls victim to Google’s impulsivity: the company say it cares for a certain market, but it does not seem that products in those markets can be focused, ongoing and well supported. Wear OS used to have the best weight training tracking, which could automatically detect and report workouts, but Google inexplicably killed the feature about two months ago. There used to be a Google Fit website, which like Fitbit would present all your stats from a large dashboard, but Google killed the Google Fit website in early 2019 after years of neglect. In the end, it never supports things like Wear OS’s weight tracking, launched in 2017.

Neither Google Fit nor Wear OS was mentioned a single time in the announcements from Google and Fitbit on Thursday.

Fitbit is also not a slam dunk acquisition in the healthcare sector. Although the company was a pioneer in the original pedometer market and (perhaps) could be seen as a valuable brand, Fitbit’s market share collapsed to single digits thanks to increased competition. Apple is attacking it from the top with the Apple Watch, and Chinese companies like Xiaomi are dominating in the cheap pedometer market. How a Fitbit / Google team will solve one of these problems is unclear. Nor will it give Google smartwatches a stable, competitive hardware platform that they desperately need. This deal feels more like two last companies working together to try to survive.

Privacy and the example that Nest left

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

Google’s side of the story is set out in the blog post, with Osterloh saying: ‘This agreement has always been about devices, not data, and we’re been clear from the start that we’ll protect the privacy of Fitbit users. .. Fitbit users’ health and wellness data will not be used for Google advertising and this data will be separated from other Google advertising data. ‘Google also says it will do nothing with Android, such as connecting all Android phones exclusively to Fitbit laptops, which was apparently something the EU was worried about.

The EU part of this is here and says mostly the same, noting: “Google will maintain a technical separation of the relevant Fitbit user data. The data will be stored in a ‘data silo’ that will be separate from any other Google data be used to advertising. ‘It sounds a lot like the data separation promise Google has for Nest, where Google says it will “keep your home video recordings, audio recordings and sensor readings separate from ads.” The EU says also that Google is committed to giving third parties access to Fitbit data through the Fitbit Web API, Google’s commitment is ten years.

Existing Fitbit data definitely needs to be protected, and you can delete your Fitbit account here if you wish. In the future, Fitbit’s fitness tracking and Google’s Wear OS fitness tracking will be so similar that Google will not really get a new data stream from Fitbit acquisition. The one new product area may be cheap Fit counters, but Android smartphones can do it already, and so can the Android smartwatches. Google will get more users thanks to the existing Fitbit user base, but as we have already said, it is not very big as all the competitors have moved in.

There is still a big question about what will happen to Fitbit accounts. If we follow the Nest story, which only merged with Google in 2018 after a few years of failing as a standalone Alphabet company, there are likely to be big changes for Fitbit users. Nest users have seen the Nest account system dead in favor of forced migration to a unified Google Account. It also led to the loss of the “Works with Nest” API, which breached compatibility with other devices and services. As a trademark, Nest was hollowed out and used for Google’s general smart home brand, replacing the Google Home speaker line, smart screens and Wi-Fi access points, while still being used on original Nest products such as thermostats, cameras and smoke detectors. .

It certainly looks like Made by Google Fitbit devices will eventually arrive, and Google is likely to enter the cheaper market for fitness trackers. However, this does not solve any of the problems that Google has previously prevented from participating in wearables. When Google and Fitbit separately could not compete with Apple, Samsung and Xiaomi, it is not clear why they think their chances would be better together.

Ars Policy Reporter Kate Cox contributed to this report.

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