Google and Fitbit Inc. announced last week that the merger of the two companies has ended, but Alphabet Inc.’s antitrust dilemma may make this huge transaction far from complete.
“Although Fitbit is a personal health care device in the first place, it collects information and uses it to collect highly personal information,” St. John’s University law professor Anthony Sabino told MarketWatch. “I can see that Justice is deeply concerned about Google’s ability to access this kind of caring customer information through Fitbit, at least as an issue in antitrust litigation, which does not surprise me at all.”
The Wall Street Journal stated that, for its part, the US Department of Justice believes that it has not yet formally approved the transaction and is still under review, even though the transaction allowed the deadline to be formally opposed last week. report. The next steps may depend on who elected President Biden to install in key locations.
Antitrust experts are keen to watch who will lead the antitrust efforts of the Biden Administration’s Justice Department-candidates include Terrell McSweeney, who is considered business-friendly, and Jonathan Kanter, who is progressive. The chairman of the Federal Trade Commission, Joseph Simons, will step down on January 29 and will be responsible for the antitrust investigation of Facebook Inc.
And Amazon.com Inc.
His successor will not only “play an important role in the investigation,” but will also face pressure from a five-member committee of two Democrats, which said Simmons was not active enough. FTC Financial Practice Department.
The federal government and state attorneys general are conducting antitrust investigations into Google, as well as the acquisitions of the White House and the Senate controlled by the Democratic Party. These are all things at stake.
Legal proceedings against other members of Big Tech are becoming more popular. last weekThe Connecticut Attorney General, William Tong, revealed that in the distribution agreements between the state and some publishers for e-books, “an antitrust investigation has been conducted on Amazon regarding potential anti-competitive provisions.”
However, the current focus is on Google, U.S. Department of Justice prosecution, A group of state AG Led by TexasAnd another group Led by Colorado and Nebraska AG In recent months.
Google and antitrust: Big Tech’s first goal is to face more and more legal actions
Google has always (as in most actions) insisted that Fitbit transactions will greatly benefit consumers and are subject to appropriate scrutiny by regulators.
“Google will continue to protect the privacy of Fitbit users, and has made a series of binding commitments with global regulators, confirming that Fitbit users’ health data will not be used for Google ads, and that this data will be stored separately from other Google ads Data,” Fitbit CEO James Park said in a letter to Fitbit users on Thursday.
However, under the leadership of the new government and the Democratic-controlled Senate, will lawsuits by the Justice Department or these two states undermine the status of the transaction? “Technically speaking, yes, although it has been very unusual since it was approved,” said Douglas Gansler, an expert on antitrust law and the former attorney general of Maryland.
According to the Hart-Scott-Rodino Antitrust Improvement Act of 1976, the transaction can proceed if there is no formal objection from the Department of Justice during the waiting period. Google has completed the waiting period and is therefore entitled to complete the transaction. Similarly, the Ministry of Justice can continue the investigation after the waiting period. Miller believes that it is unusual for regulators to withdraw transactions after the waiting period, but there are certain risks.
Bhaskar Chakravorti, Dean of the School of Global Business at Tufts University’s Fletcher School, put forward a theory that Democrats can apply a “Glass Steger Act” to the Internet . The 1933 law forced banks to separate their commercial and investment banking operations to ensure that the merger would not weaken competition. On the technical side, this could mean forcing social media companies to run their platforms separately from applications and businesses that benefit from user data.
He said: “Any transaction made by Google, especially with equipment manufacturers, has a certain inherent instability.”
Legal scholars said that despite this, the Justice Department took the opportunity to raise an objection before the transaction was completed, which made the reversal process extremely difficult.
Sabino of St. John’s University said that the Justice Department would revoke approval of the transaction as “very unlikely.” Even when an investigation led to its filing of an antitrust lawsuit in October, it encountered opposition, and the European Union approved the acquisition last month. Sabino told MarketWatch: “It’s simply unfair to go back now.”
He added that, however, the Fitbit purchase “will have an impact on the pending case. [DoJ] Antitrust litigation. After all, the key to federal lawsuits (now about a dozen or more states have joined) is Google’s ability to collect information about users through Google searches, YouTube usage, etc. “
Then there is the historical pandemic and economic chaos inherited by the Biden administration, which may put antitrust cases against big technologies into trouble.
“Technical antitrust issues will not get the necessary push and push from the White House. Therefore, even if many House Democrats and prominent senators like Amy Klobuchar are keen to pursue this goal, the entire agenda may be possible. Will be on it.” Chakravorti said.
Klobuchar seems very keen on closing deals.
Klobuchar said in a statement last week: “Google announced that it will close its acquisition of Fitbit, and the transaction is still under review by the Department of Justice, which once again shows the company’s lack of concern about compliance with antitrust laws.”
The senator opposed to the senator’s acquisition of large technology companies said: “Before Biden’s executive officers took over, the rush to complete the transaction is even more disturbing.” “Although the merger was completed prematurely, I still urge the department to comply with the law. Seek all appropriate remedies to protect competition and consumers from any anti-competitive effects caused by this transaction.”
Privacy advocates are still very willing to question mergers on antitrust issues, and they worry about the consequences of big deals like Fitbit.
The Department of Justice’s failure to prevent Google from acquiring Fitbit is not only incoherent and embarrassing, but also dangerous. This transaction poses a serious security risk to the personal data of Fitbit consumers,” said Sarah Miller, executive director of the American Economic Freedom Project. “Google uses its extensive portfolio of Internet services to monitor its users and Profit from highly personal information. There is no reason to believe that they will not do the same to Fitbit. “
“In fact, Google had previously lied about data to antitrust enforcers. Just like an antitrust lawsuit against Google last month, the company promised to the Federal Trade Commission and Congress how it would manage DoubleClick’s Acquisition, but then Google ignored the acquisition.”
“President-elect Biden should ensure that the role of his government is to reverse this transaction as quickly as possible,” Miller said.