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File Image: IOL

Google given the green light to merge with Fitbit in South Africa

By Siphelele Dludla Time of article published Dec 23, 2020

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US multinational tech company Google LLC has been given the greenlight to merge with electronics and fitness company Fitbit Inc. in South Africa.

The Competition Commission on Tuesday conditionally approved the proposed merger whereby Google intends to acquire the wearable technology company.

This is a global merger, notified in several jurisdictions, including the European Union, the US, Australia, Canada and Japan.

The main Fitbit products available in South Africa are fitness trackers, smartwatches and the Fitbit mobile app.

The Commission said it found that the proposed transaction was likely to result in a substantial prevention or lessening of competition.

It said that it was concerned that as a direct result of the proposed merger, Google will exclude competing suppliers of wrist-worn wearable devices from accessing its Android operating system for smartphones.

Android is a dominant mobile operating system (OS) and, unlike the Apple ecosystem, it is not vertically integrated into the production of wrist-worn wearable devices prior to the merger.

The Commission said this would significantly alter the market structure for the supply of wrist worn wearable devices in South Africa, and increase barriers to entry for potential entrants in the market.

But to alleviate all these concerns, Google committed to making access to the Android OS available, without charge for access and on a non-discriminatory basis, to all competing manufacturers of wrist-worn wearable devices.

Google also committed to maintain data separation between the Fitbit data and Google’s existing data and not to use any Measured Body Data or Health and Fitness Activity Location Data from Fitbit in, or for, Google Ads.

The Commission said that these conditions were for a period of 10 years and were in line with what is offered in other jurisdictions.

Commissioner Tembinkosi Bonakele said the conditions will be monitored by an independent Trustee who will have the necessary skills, competencies, and technical abilities to monitor these conditions.

“This merger affirms the need for regulatory interventions in digital markets. Regulatory authorities need to look closely at mergers and acquisitions in these rapidly changing markets, particularly when large global technology firms that operate across multiple jurisdictions are involved.

“The remedies we have agreed ensure that the transaction does not raise barriers to new entrants in the wearable technology and nascent health data markets,”Bonakele said.

“In that way we would be assured of inclusive growth and equal distribution of wealth in rapidly growing digital markets.”

BUSINESS REPORT ONLINE

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