Google potentially faces a fine of up to $ 400m if it takes (acquires) Fitbit before an Australian competition regulator completes a transaction investigation.
The Australian Competition and Consumer Commission (ACCC) on Tuesday rejected a request from Google for a court order to reduce its data use from wristbands.
Australian Competition Commission’s Investigation
Watchdog chairman Rod Sims said instead the ACCC would continue to investigate the transaction and intend to make a decision on March 25.
Last month, Google agreed to purchase Fitbit for US $ 2.1bn (A $ 2.8bn) in cash that will give the search team access to 27 million wrist band users.
The ACCC’s decision sets the stage for a confrontation with the European Union, which last week decided to accept the same action, but is in line with concerns raised by the US Department of Justice over Google and Fitbit’s domestic administration.
Sims said the ACCC was concerned about “the so-called direct closure, which means Google may have incentives, and power, to harm rivals if it catches Fitbit by simply making it difficult for them to communicate with Android devices”.
“As, as I said, it can be a skill and incentive to discriminate against other players so as a result of that you will have Apple and Android device wear – you get the same rights you have in apps, for example, and you’re already on mobile. ”
Sims said that if the U.S. Department of Justice ratified the agreement and Google went ahead with the acquisition of Fitbit without the approval of the ACCC, the regulator would consider whether it had legal powers to block the deal.
If it could not block the deal, the ACCC would consider bringing legal action for breaching competition law. That would be punishable by fines of up to 10% of Google’s estimated Australian turnover of about $4bn a year.
“The penalties could be very high,” Sims said. “So, you know, we have a lot of options here and we do our best with the options we have in front of us.”
What Is Google’s Response?
A Google spokesman said the company was disappointed with the delay but “will continue to contact the ACCC to answer their questions”.
“We have been working constructively with regulators around the world to close the acquisition of Fitbit and to start building new helpful devices for users,” he said in a statement. “This deal has always been about devices, not data, and we are committed to protecting Fitbit users’ privacy.”
This move is not directly related to ACCC’s action against Google and other technology companies for advertising and use of content content free of charge to media companies.
Sims said Australian law meant the ACCC faced a high bar in blocking mergers but it was not too late to disrupt the emerging Google-Apple duopoly.
“I know one of the main criticisms of the ACCC is we do not block mergers. I just have to point out, it is tricky to do so,” he said.
“I guess the second thing I’d say is that if you look at the recent actions in the US, you look at the three consumer actions we’ve got here, you look at the legislative responses in Europe, there’s a lot happening. So I don’t think it’s too late at all.”
