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Fitbit and Google Complete Deal for $2B+

Fitbit and Google Complete Deal for $2B+

The U.S. Justice Department said it’s not done reviewing the deal, but Google and Fitbit are stepping forward.

As expected, Google has completed its acquisition of Fitbit for $2.1 billion. Regulators in the U.S. are still probing for antitrust and regulatory violations, but Fitbit President and CEO James Park still sent out an email to users of the company’s step-tracking fitness monitors announcing, “I’m writing today to let you know that Fitbit is now officially part of Google.”

Google (or more specifically Google’s parent company, Alphabet) declared its intention to purchase Fitbit in November. Weeks later, the U.S. Justice Department announced it was investigating the deal to determine if it broke any anti-trust laws. Google owns and controls a wealth of data on user behaviors and Fitbit would add to it a trove on how its users exercise, sleep and travel day today.

The European Union’s regulatory arm, the European Commission, also probed the deal, more concerned about privacy. The Commission agreed to allow it after some guarantees; Google says it won’t use Fitbit data to generate targeted advertising for users in the E.U.

U.S. regulators said they aren’t finished with the deal. It’s apparently rare for such a large deal to conclude with a probe looming. Google’s actions are pretty brazen, considering that, at present, the Justice Department is suing the company for alleged violation of antitrust laws.

Google may be betting that they will get less resistance from the Justice Department under President-elect Joe Biden, who takes office next week. President Donald Trump often lashed out at “big tech” for perceived bias against conservatives and threatened action.

Or Google may be anxious to join the ballooning market for health wearables, as competitors like Apple and Samsung make inroads into the market and foster customer familiarity and brand loyalty with their systems.

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The deal will transfer to Google the 10 percent of the global wearables market now owned by Fitbit. Founded in 2007, Fitbit pioneered the market for fitness trackers, introducing many users to the idea of tracking their steps and tallying them to compete with friends. According the company, it amassed 28 million users and sold more than 100 devices.

Meanwhile, Google’s efforts in the wearable market have been awkward. In 2014, it began its Android Wear line, which never quite became a hot name. Google also allowed outside companies to license its iOS mobile phone operating system, so legacy watch-makers of the wild-up era, like Fossil, could make smart watches that paired with Google-run devices and accounts. And it allowed its own watches to interact with other mobile phone systems. If you’re confused, well… so were some consumers, who dubbed Google’s smart watch apparatus an unsatisfying mismatch of systems.

Fitbit will give Google a sturdier base from which to expand into the wearable market.

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