Google and Fitbit proudly announced yesterday that their $2.1 billion acquisition had been completed after months of regulatory scrutiny. Unfortunately for that deal, though, it may still face legal trouble as Google didn’t wait on approval from the US Department of Justice (DOJ) or Australian regulatory authorities before completing the Fitbit buyout.
Between the November 2019 announcement and yesterday’s apparent closing, Google faced several investigations regarding the deal. The most important of that was from the EU, which gave its approval in late December. The DOJ also had an ongoing investigation, but never gave Google approval before yesterday’s announcement.
Ryne Hager of Android Police figured out how Google was able to get around this. The DOJ only had a specific period of time to give its approval or disapproval on the deal, but that time period lapsed without a final answer. As a result, Google simply went ahead given the lack of any yes or no. At this point, it’s unclear if the US DOJ will take any legal action against Google and Fitbit.
…harm competition and consumers in the United States. The Division remains committed to conducting this review as thoroughly, efficiently, and expeditiously as possible.”
— CeciliaKang (@ceciliakang) January 14, 2021
A Google spokesperson said regarding the DOJ investigation:
We complied with the DOJ’s extensive review for the past 14 months, and the agreed upon waiting period expired without their objection. We continue to be in touch with them and we’re committed to answering any additional questions. We are confident this deal will increase competition in the highly crowded wearables market, and we’ve made commitments that we plan to implement globally.
Where Google really jumped the gun was in Australia. There, the Australian Competition and Consumer Commission still had a publicly ongoing investigation of the deal that was expected to close in March of this year. The ACCC had cited competition concerns as the reason for trying to block the deal, being concerned that Google would “squeeze out” Fitbit’s rivals. Of course, that statement essentially ignored the monopoly that Apple holds over the iOS wearable market.
At this point, the ACCC is looking into an “enforcement investigation” that could result in legal action over the Fitbit and Google deal.
As the transaction completed on 14 January 2021, before the ACCC had finished its investigation, this matter has become an enforcement investigation of a completed merger. No further updates on the investigation will be made on this public register.
In a statement to Android Police, the ACCC further says:
“Google’s decision to complete its acquisition of Fitbit before we completed our merger review means we are now conducting an enforcement investigation. As a result, and depending on the results of our investigation, we will consider whether to take legal action on this matter,” ACCC Chair Rod Sims said.
In December, the ACCC decided that it would not accept a long-term behavioural undertaking offered by Google that sought to address competition concerns because of the significant difficulties in effectively monitoring and enforcing compliance with the undertaking.
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