The Department of Justice has stepped up its investigation of Google’s proposed $2.1 billion acquisition of Fitbit, a deal that critics say could pose increased threats to customer privacy, two sources close to the situation told The Post. In a move that typically signals increased scrutiny for a merger, regulators are now conducting a so-called …
The Department of Justice has stepped up its investigation of Google’s proposed $2.1 billion acquisition of Fitbit, a deal that critics say could pose increased threats to customer privacy, two sources close to the situation told The Post.
In a move that typically signals increased scrutiny for a merger, regulators are now conducting a so-called second request review, asking for more documents and taking additional time to investigate the deal, the sources said.
Assistant Attorney General Makan Delrahim, who heads the DOJ’s antitrust division, has recused himself from the case because of his past history as a lobbyist working for Alphabet’s Google.
Now, it is the Attorney General William Barr who is issuing civil investigative demands (CIDs) to parties in the investigation and will be more directly involved in the review than he would be normally, sources said.
Barr told the Wall Street Journal in a March 23 article that his investigation of Google’s overall anti-competitive behavior in suppressing competition would be wrapped up by early summer.
“One would think Google would be a lower priority for government until corona clears,” Seth Bloom of Bloom Strategic Counsel told The Post. “But given Barr’s statement, it seems like he hasn’t been deterred.”
Likely, a decision on Fitbit will not happen before the conclusion of the larger Google investigation, according to Bloom, formerly a general counsel for the US Senate Antitrust Subcommittee.
“I think the Fitbit review is serious,” Bloom said. “Approval is not a slam dunk.”
The DOJ is concerned that if Google owned Fitbit, which has 28 million users, it would give the search giant an even bigger window into people’s private data, including sensitive health information, sources said.
“The use of data privacy as an antitrust theory — that is untested,” Bloom said. “Antitrust scholars have been talking about it for over a year.”
“The question is what will Google do with the information Fitbit collects. You could see the DOJ forcing Google to sign a legal commitment to not use the data side of Fitbit,” Bloom continued.
In February, the European Data Protection Board raised concerns about the merger, saying there could be “a high level of risk to the fundamental rights to privacy and to the protection of personal data”.
When announcing the merger, Fitbit said it never sells personal information and its data will not be used for Google ads.
Google agreed to pay $7.35 a share for Fitibit. In mid-day trading, Fitbit’s shares were selling for $6.50.
