The Australian Competition and Consumer Commission (ACCC) Tuesday rejected an undertaking by Google in connection with its proposed takeover of sports wearables manufacturer Fitbit that it would behave in certain ways towards rival wearable manufacturers, not use health data for advertising and, in some circumstances, allow competing businesses access to health and fitness data

Google proposed to acquire Fitbit in November 2019 and submitted its undertaking before the ACCC as part of an international effort to gain approval of its acquisition by national regulators. The ACCC commenced public review of the proposed acquisition and undertook market inquiries to assess whether the proposed acquisition would lessen competition in any market in Australia in contravention of section 50 of the Competition and Consumer Act 2010.

In June, the ACCC released a statement of issues outlining its preliminary views on competition issues arising from the proposed acquisition. It was of the view that the acquisition may push Fitbit’s rivals out of the wearables market and as Google already holds a leading position in gathering consumer data, the proposed acquisition would give it a significant competitive advantage in online advertising and several other markets.

Google responded to the competition concerns by offering to follow a court-enforceable undertaking that would dictate its behaviour towards rival wearable manufacturers, usage of health data for advertising, and, in some circumstances, allow competing businesses to access health and fitness data.

But ACCC Chair Rod Sims said:

While we are aware that the European Commission recently accepted a similar undertaking from Google, we are not satisfied that a long term behavioural undertaking of this type in such a complex and dynamic industry could be effectively monitored and enforced in Australia…the ACCC must reach its own view in relation to the proposed acquisition given the importance of both companies to commerce in Australia.

The ACCC noted that while Europe has granted conditional clearance to the proposed acquisition, other competition authorities, such as the US Department of Justice, are yet to make a decision. It announced that it would work closely with overseas agencies to address important competition concerns and extended its decision date to March 25 for further review of the transaction.