ANALYSIS - Google says its Fitbit acquisition is about devices but is it just harvesting more data?

Mariam Cheik-Hussein
By Mariam Cheik-Hussein | 29 July 2020

Google has maintained that its acquisition of wearables brand Fitbit is about the devices and not an attempt to harvest more user data for advertising. However, industry experts expect the tech giant to do just that further down the track.

Last year Google announced a US$2.1 billion deal to purchase Fitbit which has some 28 million global active users. The move sparked concerns from competition regulators around the globe about how Google will use sensitive user data from the devices which could further entrench its dominance in digital advertising.

Currently, the European Commission and the Australian Competition and Consumer Commission (ACCC) are among those looking into the deal, with the US Department of Justice reportedly carrying out its own investigation.

Fitbit’s leading share in the wearable tech market has dwindled from 45% in 2014 to just 3% this year. Competitors such as Apple, which holds 29% of the market according to market research firm IDC, Samsung and Huawei have since emerged. Given this, experts don’t think a merged Google and Fitbit will kill competition in the tech space.

Instead, the focus has been on how the Fitbit data will be used. To ease concerns from regulators, Google has pledged to the EC it would not use Fitbit health and wellness data for Google ads, a position it’s maintained since announcing the deal last November.

"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,” a local Google spokesperson says.

“Similar to our other products, with wearables, we will be transparent about the data we collect and why. And we do not sell personal information to anyone."

The EC is currently taking feedback on whether to accept Google’s pledge or launch a full-scale investigation, according to reports.

Industry insiders say the ACCC’s look into the deal is still in its early stages and the watchdog hasn’t yet asked for a similar pledge from Google.

However, when launching its investigation last year, ACCC chair Rod Sims notes that given Google’s history it is “a stretch to believe any commitment Google makes in relation to Fitbit users’ data will still be in place five years from now”.

Industry experts echo Sims’ thoughts on Google’s plans for Fitbit.

“Google says this acquisition won’t have any immediate impact on advertising – yet if history is anything to go by there will probably be some subtle adjustments to this stance over time,” Wavemaker head of technology Victoria Brennan tells AdNews.

“It’s a very likely first stage that users will be asked to link their Fitbit accounts to their Google accounts, so immediately those disparate data sets will be connected, and trends analysed whether they’re activated through advertising or not.

"It’s not a stretch to envisage a future where our BMI data is being used to target us with diet plans, for instance, which for many people would create useful and relevant targeting.

“Every time these headlines appear there is an uneasiness about how and where that data will be used, but the reality is that we live in an era where more of the things that make our lives easier also leave a data trail. As always it comes down to value exchange and ultimately, it’s down to the user whether their data is worth the services they gain from the tool in return.”

The ACCC noted in its statement of issues that Fitbit’s data is “unique”.

“It is voluminous in depth and the nature of its customer base is such that it lends itself to having value for drawing health insights or for developing data-dependent health services,” the ACCC said.

“Feedback from the market is that other wearable datasets are not as voluminous, reliable or broad as Fitbit’s data.”

Mediacom’s biddable group director Ryan Goldsworthy tells AdNews that given Fitbit has such a small share of the wearables market, it’s likely Google isn't focused on gaining health data.

“The devil is in the detail – Google might not use the health data, but there’s loads of other data they can utilise,” Goldsworthy says.

“Fitbit, and wearables more broadly, are on a hyperbolic development trajectory. You won’t be reading this on your phone in three years, it will be from your wrist, your glasses, your voice-command ring, or the infra-red projection onto your forearm from a bracelet.

“With the backing of Alphabet, Fitbit will release a slew of advanced wearables and capture all the same data your mobile does now. They don’t need the health data.”

Meanwhile, Starcom head of digital and commerce Ryan Menezes says Google would need to reassure customers and regulatory authorities that it will act ethically by clearly defining what data will and will not be used. This could include creating a legally binding pledge, such as its proposal to the EC, to instil trust amongst customers and regulators.

Menezes tells AdNews Fitbit would fuel Google’s connected ecosystem and could help the tech giant extend its reach among new customers, particularly iPhone users, and in environments such as gym and exercise environments that would enable brands to extend their reach potential and connect with customers in a meaningful way based on location and time of need.

“Google could potentially collect anything from location to personal health and wellbeing data. It’s likely health food, pharmaceutical and sport/health/energy drink companies would be particularly interested in this data,” he says.

“Location data has diverse uses in targeting and measurement. Brands could target customers based on specific points of interest, such as visited specific grocery stores, fashion retailers, pharmacies, car dealerships, travel destinations etc.

“Location is also a powerful intent signal and an opportunity to reach high-affinity and in-market customers during times of need. Measurement strategies could also help determine if customers walked in-store after being exposed to Google’s advertising. Media optimisation would also benefit from the understanding and attribution of users location data, superseding archaic media metrics such as click-through rates.

“Usage of health and wellbeing data will have ethical implications and will hopefully be excluded when it comes to targeting ads.”

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