Google says it’s closing the Fitbit acquisition – uh, without DOJ approval?

Google senior vice president of hardware Rick Osterloh announced Thursday that Google has completed its acquisition of Fitbit. The $ 2.1 billion deal was announced in November 2019 and kicked off a regulatory review process by governments around the world concerned about Google’s influence on the internet and the data it may collect on them. users.

Normally, Osterloh announcing that “Google has finalized its acquisition of Fitbit, and I personally welcome this talented team to Google” would mean Google has erased its global regulatory glove. Google’s announcement today is highly unusual since the Justice Department has yet to clear the deal. As the DOJ told the New York Times reporter Cecilia kang, “The Antitrust Division 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 like this when it is also dealing with a DOJ antitrust investigation.

Asked about the status of the DOJ merger investigation, a Google spokesperson 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 continue to be in contact with and undertake to answer any further questions. We are confident that this agreement will increase competition in the busy portable device market, and we have made commitments that we plan to implement globally. “

However, the legal issues are working, the announcement doesn’t reveal much about Google’s future plans for Fitbit. Osterloh starts off by praising Fitbit’s existing lineup, naming the Fitbit Sense smartwatch, the Inspire 2 tracker, and various Fitbit health metrics. Google doesn’t make inexpensive fitness trackers, but the company’s Google Fit app has a lot of overlap in smartwatches and health metrics. Google says it wants to “make health and wellness more accessible to more people” and “we are convinced that the combination of advanced technology, product expertise and innovation in health and wellness -Being Fitbit with the best of Google’s AI, software and hardware will boost competition. in wearable devices and make the next generation of devices better performer and more affordable. ”

Fitbit CEO, President and Co-Founder James Park also posted a blog post today, saying, “A lot of the things you know and love about Fitbit will remain the same. We will remain committed to doing what is good, to put your health and wellness at the center of everything we do, and to offer a unique approach with choices that work on both Android and iOS. “

The Fitbit and Google overlap

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

On the other hand, Wear OS’s main competition, the Apple Watch, has the luxury of Apple’s internal SoC division, which steadily sees its performance improve every year. Apple doesn’t officially talk about the specs for the chip, but it does say that the latest Apple Watch S6 SoC is based on the A13 Bionic, and since the A13 is 7nm, so is the S6. As a 12nm Cortex A53-based quad-core SoC, the Snapdragon Wear 4100 is still not competitive with what Apple is offering, with Qualcomm only promising an 85% performance improvement over there before. is seven years old. However, when you are starving, it all looks like a delicious meal.

Google Fit fell victim to Google’s impulsiveness: the company said he cares about a certain market, but it just doesn’t seem possible to keep the products focused, running and well supported in those markets. Wear OS had the best strength training tracker, 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, which like Fitbit presented all of your stats from one big dashboard, but Google killed the Google Fit website in early 2019 after years of neglect. He ended up never putting up with things like the Wear OS weight tracker, which launched in 2017.

Neither Google Fit nor Wear OS was mentioned once in Google and Fitbit’s announcements on Thursday.

Fitbit isn’t a slam-dunk healthcare acquisition, either. While the company was a pioneer in the original step counter market and could (perhaps) be considered a valuable brand, Fitbit’s market share slumped to single digits thanks to increased competition. Apple is attacking it from the high end with the Apple Watch, and Chinese companies like Xiaomi are dominating the cheap meter market. How a Fitbit / Google team will solve any of these issues is unclear. It also won’t give Google smartwatches a stable and competitive hardware platform they desperately need. This deal is more like two bottom-up companies teaming up in an attempt to survive.

Privacy and the example that Nest left behind

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

Google’s version of the story is laid out in the blog post, with Osterloh saying, “This deal has always been about devices, not data, and we’ve made it clear from the start that we will protect privacy. of Fitbit users … Fitbit User health and wellness data will not be used for Google ads and that data will be segregated from other data relating to Google ads. ”Google also says it will do nothing crazy with Android, like locking all Android phones exclusively to Fitbit wearable devices, which was apparently something the EU worried about.

The EU part is here and says essentially the same thing, noting: “Google will maintain a technical separation of relevant Fitbit user data. The data will be stored in a“ data silo ”which will be separate from all other Google data that is used for advertising. “Sounds a lot like the data separation pledge Google made for Nest, where Google says it will” keep your video footage, audio recordings, and home environment sensor readings separate. advertising”. The EU also states that Google is committed to allowing third parties to access Fitbit data through the Fitbit web API. The duration of Google’s commitment is 10 years.

Existing Fitbit data should definitely be protected, and you can delete your Fitbit account here if you want to. Going forward, however, Fitbit’s fitness tracker and Google’s Wear OS fitness tracker are so similar that Google doesn’t really get a new data feed from the Fitbit acquisition. The only new product area might be cheap Fitbit-style step counters, but Android smartphones can already do it, as can Android smartwatches. Google will gain more users from the existing Fitbit user base, but as we’ve said before, that’s not a big deal since all of the competition has moved in.

There is still a big question about what will happen to Fitbit accounts. If we follow the story of Nest, which only merged with Google in 2018 after a few years of failure as a stand-alone Alphabet company, big changes are likely to be coming for Fitbit users. Nest users have seen the Nest account system get killed in favor of a forced migration to a unified Google Account. It also led to the loss of the “Works with Nest” API, which broke compatibility with other devices and services. As a brand, Nest has been hollowed out and used for overall Google smart home branding, replacing the Google Home speaker line, smart displays, and Wi-Fi hotspots, while still being used on original Nest products such as thermostats, cameras, and smoke detectors. .

It certainly looks like Made by Google Fitbit branded devices will eventually arrive and Google will likely enter the market for cheaper fitness trackers. However, this does not solve any of the issues that have kept Google from competing in portable devices before. When Google and Fitbit couldn’t compete individually with Apple, Samsung, and Xiaomi, it’s unclear why they think their odds would be better together.

Kate Cox, reporter at Ars Policy, contributed to this report.

Listing Image by Fitbit