In a set-back for Googles plan to acquire health wearable company Fitbit, the European Commission has announced its opening an investigation to dig into a range of competition concerns being attached to the proposal from multiple quarters.

This means the deal is on ice for a period of time that could last until early December.

The Commission said it has 90 working days to take a decision on the acquisition so until December 9, 2020.

Commenting on opening an in-depth investigation in a statement, Commission EVP Margrethe Vestager who heads up both competition policy and digital strategy for the bloc said: The use of wearable devices by European consumers is expected to grow significantly in the coming years. This will go hand in hand with an exponential growth of data generated through these devices. This data provides key insights about the life and the health situation of the users of these devices.Our investigation aims to ensure that control by Google over data collected through wearable devices as a result of the transaction does not distort competition.

Google has responded to the EU brake on its ambitions with a blog post in which its devices & services chief seeks to defend the deal, arguing it will spur innovation and lead to increased competition.

This deal is about devices, not data, Google VP Rick Osterloh further claims.

The tech giant announced its desire to slip into Fitbits data-sets back in November, when it announced a plan to shell out $2.1BN in an all-cash deal to pick up the wearable maker.

Fast forward a few months and CEO Sundar Pichai is being taken to task by lawmakers on home turf for stuff like helping destroy anonymity on the Internet. Last years already rowdy antitrust drum beat around big tech has become a full on rock festival so the mood music around tech acquisitions might finally be shifting.

Since news of Googles plan to grab Fitbit dropped concerns about the deal have been raised all over Europe with consumer groups, privacy regulators and competition and tech policy wonks all sounding the alarm at the prospect of letting the adtech giant gobble a device maker and help itself to a bunch of sensitive consumer health data in the process.

Digital privacy rights group, Privacy International one of the not-for-profits thats been urging regulators not to rubberstamp the deal argues the acquisition would not only squeeze competition in the nascent digital health market, and also for wearables, but also reduce what little pressure there currently is on Google to compete in relation to privacy options available to consumers (both existing and future Fitbit users), leading to even less competition on privacy standards and thereby enabling the further degradation of consumers privacy protections, as it puts it.

So much noise is being made that Google has already played the we promise not to card thats a favorite of data-mining tech giants. (Typically followed, a few years later, with a we got ya sucker joker as they go ahead and do the thing they totally said they wouldnt.)

To wit: From the get-go Fitbit has claimed users health and wellness data will not be used for Google ads. Just like WhatsApp said nothing would change when Facebook bought them. (Er.)

Last month Reuters revisited the concession, in an exclusive report that cited people familiar with the matter who apparently told it the deal could be waved through if Google pledged not to use Fitbit data for ads.

Its not clear where the leak underpinning its news report came from but Reuters also ran with a quote from a Google spokeswoman who further claimed: Throughout this process we have been clear about our commitment not to use Fitbit health and wellness data for Google ads and our responsibility to provide people with choice and control with their data.

In the event, Googles headline-grabbing promises to behave itself with Fitbit data have not prevented EU regulators from wading in for a closer look at competition concerns which is exactly as it should be.

In truth, given the level of concern now being raised about tech giants market power and adtech giant Google specifically grabbing a treasure trove of consumer health data, a comprehensive probe is the very least regulators should be doing.

If digital policy history has shown anything over the past decade+ (and where data is concerned) its that the devil is always in the fine print detail. Moreover the fast pace of digital markets can mean a competitive threat may only be a micro pivot away from materializing. Theories of harm clearly need updating to take account of data-mining technosocial platform giants. And the Commission knows that which is why its consulting on giving itself more powers to tackling tipping in digital markets.But it also needs to flex and exercise the powers it currently has. Such as opening a proper investigation rather than gaily waving tech giant deals through.

Antitrust may now be flavor of the month where tech giants are concerned with US lawmakers all but declaring war on digital robber barons at last months big subcommittee showdown in Congress. But its also worth noting that EU competition regulators for all their heavily publicized talk of properly regulating the digital sphere have yet to block a single digital tech merger.

It remains to be seen whether that record will change come December.

The Commission is concerned that the proposed transaction would further entrench Googles market position in the online advertising markets by increasing the already vast amount of data that Google could use for personalisation of the ads it serves and displays, it writes in a press release today.

Following a preliminary assessment process of the deal, EU regulators said they have concerns about [emphasis theirs]:

By acquiring Fitbit, Google would acquire (i) the database maintained by Fitbit about its users health and fitness; and (ii) the technology to develop a database similar to Fitbits one, the Commission further notes.

The data collected via wrist-worn wearable devices appears, at this stage of the Commissions review of the transaction, to be an important advantage in the online advertising markets. By increasing the data advantage of Google in the personalisation of the ads it serves via its search engine and displays on other internet pages, it would be more difficult for rivals to match Googles online advertising services. Thus, the transaction would raise barriers to entry and expansion for Googles competitors for these services, to the ultimate detriment of advertisers and publishers that would face higher prices and have less choice.

The Commission views Google as dominant in the supply of online search advertising services in almost all EEA (European Economic Area) countries; as well as holding a strong market position in the supply of online advertising display services in a large number of EEA countries (especially off-social network display ads), and a strong market position in the supply of adtech services in the EEA.

All of which will inform its considerations as it looks at whether Google will gain an unfair competitive advantage by assimilating Fitbit data. (Vestager has also issued a number of antitrust enforcements against the tech giant in recent years, against Android, AdSense and Google Shopping.)

The regulator has also said it will further look at:

The tech giant has already offered EU regulators one specific concession in the hopes of getting the Fitbit buy green lit with the Commission noting that it submitted commitments aimed at addressing concerns last month.

Google suggested creating a data silo to hold data collected via Fitbits wearable devices and where it said it would be kept separate from any other dataset within Google (including claiming it would be restricted for ad purposes). However the Commission expresses scepticism about Googles offer, writing that it considers that the data silo commitment proposed by Google is insufficient to clearly dismiss the serious doubts identified at this stage as to the effects of the transaction.

Among others, this is because the data silo remedy did not cover all the data that Google would access as a result of the transaction and would be valuable for advertising purposes, it added.

Google makes reference to this data silo in its blog post, claiming: Weve been clear from the beginning that we will not use Fitbit health and wellness data for Google ads. We recently offered to make a legally binding commitment to the European Commission regarding our use of Fitbit data. As we do with all our products, we will give Fitbit users the choice to review, move or delete their data. And well continue to support wide connectivity and interoperability across our and other companies products.

We appreciate the opportunity to work with the European Commission on an approach that addresses consumers expectations of their wearable devices. Were confident that by working closely with Fitbits team of experts, and bringing together our experience in AI, software and hardware, we can build compelling devices for people around the world, it adds.

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Google-Fitbit deal to be scrutinized in Europe over data competition concerns - TechCrunch