The clock is ticking as Google negotiates its planned $2.1 billion acquisition of Fitbit with European antitrust regulators. The European Commission, which is reviewing the deal and its implications for consumers, has until August 4 to make a decision.
The deal would give Google access to Fitbit’s wearable devices, as well as its trove of user data. Earlier this month, Google pledged to not use that trove of health information for targeted ads. This would reportedly assuage EU regulators, who are currently seeking feedback from competitors and healthcare providers before approving the deal, according to Reuters.
Much of the health data collected by Fitbit’s devices, whether the number of steps or location, is not subject to HIPAA requirements. But there are some exceptions: For the past five years, Fitbit has been integrating its wearables with commercial health plans and self-insured employers, in which case it would be subject to a HIPAA business associate agreement.
Google has repeatedly told news outlets that “this deal is about devices, not data.”
“That’s an important point considering it’s the reason why the Justice (Department) has gotten involved as well as the EU,” Ramon Llamas, research director for IDC’s wearables team, wrote in an email. “The big concern is that Google will tap into user data and try to sell something to them. It’s a legitimate concern, and from the start, Google has said that user data would be kept confidential.”
Llamas said the Fitbit acquisition would address a gap in Google’s operating system for wearable devices, WearOS. It has drummed up some hardware partnerships with brands like Fossil, but hasn’t made the same strides in healthcare as Apple and Fitbit.
“Whereas Apple and Fitbit have moved ahead, WearOS has not evolved with the market, putting it behind the 8 ball when it comes to sleep tracking, AFib detection, sleep apnea, and others,” Llamas wrote. “Plus, Google’s hardware partners have mostly overlooked this feature in favor of their own branded experiences.”
Fitbit’s existing relationships with corporate wellness programs would also serve as an important revenue boost.
On the other hand, where Fitbit has struggled recently, Google could be a helpful partner with its deep pockets and engineering expertise. The company has faced slowing sales recently, with its revenue down 31 percent and device sales down 26% in the first quarter of 2020.
“Fitbit is bringing both devices and services, and when you combine them together, you get a strong holistic view of a person’s health. I’d wager that Google can help take this experience even further with the addition of prescriptive data and insight into other areas of my health and fitness,” he wrote.
Fitbit has already launched a platform for health coaching and diabetes management in 2018. Earlier this year, it launched a virtual study of its atrial fibrillation algorithm.
Photo credit: Fitbit