Europe Urged to Block Google-Fitbit Deal

Renowned scholar and author Shoshana Zuboff has asserted that the European Commission should prevent the completion of the Google-Fitbit merger, framing it as a crucial matter for the preservation of democratic principles.

The Harvard University professor, whose work is considered foundational in the understanding of surveillance capitalism, has joined a growing chorus of opposition to the $2.1 billion agreement involving data and devices – a transaction that has been under regulatory review for over a year.

Numerous organizations and individuals are advocating for the blocking of the Google-Fitbit acquisition, or at least demanding the implementation of strong competition, democratic, and human rights protections beforehand. These include Amnesty International, a multitude of consumer, privacy, and digital rights advocacy groups, and the European Union’s own data protection advisor, among others.

European Union regulators are currently evaluating whether to approve the merger. The deadline for a decision was recently pushed back to early 2021, though a resolution may arrive as early as the coming week.

In August, the Commission initiated a thorough investigation into the proposed deal, expressing concerns that it would reinforce Google’s dominance in the online advertising sector by expanding the substantial volume of data Google utilizes for ad personalization.

Members of the European Parliament have also voiced doubts regarding the initial commitments made by Google, specifically the proposal to isolate Fitbit data from other Google data stores.

Google also stated it would refrain from employing Fitbit data for advertising purposes, at least for a defined timeframe (the specifics of this proposal for the European market remain unclear). Simultaneously, authorities in Australia are also scrutinizing the deal, recently soliciting feedback from industry stakeholders regarding Google’s commitment to abstain from using Fitbit data for advertising for a period of ten years.

The Australian Competition and Consumer Commission (ACCC) released draft commitments in November, including provisions such as: “Google must not use any Measured Body Data or Health and Fitness Activity Location Data in or for Google Ads” and requiring the segregation of this data.

Zuboff contends that targeted advertising represents only a small aspect of the extensive data collection practices of surveillance capitalists, and that health data is among the few types of personal information these companies haven’t yet fully exploited.

“Approving the Fitbit acquisition based on Google’s assurances against engaging in practices that are, in any case, inconsequential is a significant error,” she stated yesterday during the keynote address at the annual lecture hosted by the Science and Technology Options Assessment (STOA) panel of the EU Parliament.

“This decision should be promptly reassessed and not repeated in the future,” she further emphasized.

A Google representative declined to respond to Zuboff’s statements, directing attention solely to a blog post from August asserting that the deal centers on “devices, not data”.

Understanding the “Epistemic Coup”

During a STOA lecture, Zuboff presented a perspective on how the unrestricted collection and utilization of data by major technology companies is leading to what she termed an “epistemic coup.” This describes a situation where the extensive, digitally-driven extraction of data results in an unparalleled level of knowledge dominance by the private sector, creating significant disparities and widespread negative consequences, as a small number of data-driven entities gain the ability to exert control over individuals, democratic principles, and legal systems in pursuit of increased profitability.

She explained that the concept of an “attention economy” is misleading, stemming from a more fundamental cause: the economic drivers of surveillance capitalism. These companies are not simply publishers, distributors, or advertising technology providers; instead, they are relentless, indiscriminate collectors of all data, perpetually seeking to improve their predictive capabilities and, consequently, their financial gains.

“This level of knowledge generates a new form of influence over individuals,” Zuboff stated. She referenced the concept, within data science, of a transition from simply observing systems to actively controlling them. Initially, this applied to machines, but now extends to human behavior as well.

The comprehensive keynote is highly recommended for its clear explanation of why permitting corporations to “unilaterally appropriate private human experience as a resource for datafication, computational production, and sales” is detrimental to society and the authentic communities that comprise it—drawing a parallel to the uncontrolled extraction of oil for corporate gain, which threatens the planet’s survival by contributing to climate change, loss of biodiversity, and widespread extinction of species.

The central argument is that the primary objective of surveillance capitalism is human nature itself—with Zuboff highlighting the “data business” strategy of “covert extraction methods” that she believes are diminishing our capacity to resist.

“Currently, our primary challenge isn’t data or technology itself—but rather the entities that extract it, spearheaded by a few large corporations: Google, Facebook, Apple, Amazon, and Microsoft, among others, along with their intricate and extensive networks. These corporate institutions have pioneered a new approach to extraction, but with a concerning and unexpected element… These corporations prioritize their own economic interests over the sovereignty of individuals, the functioning of democracy, and the well-being of humanity.”

The keynote also included a plea to European legislators to intervene and reverse the current trajectory, which is proving harmful to humanity.

“I am here today because the European Union offers the greatest opportunity to change this course before unprecedented and unlawful concentrations of knowledge and power become as irreversible and damaging to our societies as the buildup of carbon dioxide in the atmosphere has become to our planet,” Zuboff asserted, adding: “The prospect of leaving both of these crises to future generations is unacceptable.”

EU lawmakers are preparing to release a significant set of legislative proposals designed to modernize regulations for digital services and introduce new obligations for platforms with substantial market influence.

The Commission’s Digital Services Act (DSA) and Digital Markets Act (DMA) proposals are scheduled to be unveiled next Tuesday—marking the beginning of a lengthy process of negotiation to transform these policies into EU law.

The timing of this release is particularly noteworthy, coinciding with the Google-Fitbit decision. This is especially relevant because Margrethe Vestager, a key figure in developing the new digital strategy, also serves as the competition commissioner—tasked with simultaneously evaluating whether to approve the tech giant’s latest data acquisition while finalizing ex ante rules for gatekeepers that may not take effect for several years.

Vestager informed the EU parliament’s Committee on Economic and Monetary Affairs this week that the Commission’s forthcoming proposals for a comprehensive overhaul of digital regulations are essential to address the challenges posed by the platform economy.

She acknowledged that the scale and scope of the platform economy are “unprecedented and expanding,” noting that the digitization process has “resulted in a concentration of data, intellectual property, capital—and consequently, significant power in the hands of a few global companies.”

This situation is making it “critically important” to supplement existing EU competition law enforcement with dedicated regulations for digital services and major platform operators, Vestager explained.

“The DSA will establish a clear set of due diligence obligations and modernize the e-commerce framework for all Internet services within the EU, with the goal of ensuring that digital services operate without borders within the EU, defining clearer responsibilities and accountability for online platforms like social media and marketplaces,” she told MEPs—emphasizing that the overarching objective is to guarantee that consumers receive the same protections online as they do offline.

The purpose of the DMA—and its forthcoming list of “dos and don’ts” for platforms designated as gatekeepers—is to ensure that digital markets “remain open and competitive,” thereby serving consumers “in the most effective manner possible.”

‘Trust but verify’ through rigorous auditing

During her primary address, Zuboff proposed that EU authorities should adhere to two fundamental principles as they deliberate on appropriate actions.

First, she advocated for a “trust but verify” approach when dealing with surveillance capitalism – moving away from passively accepting assurances and later discovering they are undermined by the pursuit of maximum data extraction. (She cited the notable instance of Facebook retracting a previous commitment made to EU regulators regarding the integration of WhatsApp user data with Facebook data as a relevant example.)

Second, she emphasized the importance of recognizing that the negative consequences extend far beyond the initial context of targeted advertising, as this economic model has expanded into numerous other sectors. She cautioned EU regulators against focusing too narrowly on any concessions offered by Google as it seeks to establish another avenue for data collection.

We have contacted the Commission for a response to Zuboff’s statements.

Zuboff also addressed concerns regarding the belief among EU regulators that they lack the legal basis to block the Google-Fitbit acquisition.

“If the approval of Google’s acquisition of Fitbit stemmed from a conclusion that current EU laws are insufficient to successfully defend a denial of the acquisition in European courts, then we should immediately pause this discussion and convene an emergency parliamentary session to enact stronger legislation capable of withstanding legal challenges. Such laws are essential,” she asserted.

It would be particularly ironic if the Commission approved the Google-Fitbit merger due to concerns about potential legal defeat – considering the frequent recourse to legal challenges by tech companies to obstruct the enforcement of existing EU regulations. Furthermore, these companies actively lobby against any new regulations or legislative proposals that might restrict their ability to maximize data collection.

Zuboff identified the upcoming DMA as “the legal tool to achieve this necessary lawmaking [against surveillance capitalists],” directing her comments to those within the EU with the authority to create laws.

“Be clear: This represents your opportunity to take decisive action to safeguard democracy against the influence of surveillance capitalism. Hesitation is not an option,” she stated, also noting that the DSA is equally vital for protecting democracy.

“This is your moment to finally expose the inner workings of surveillance capitalism and assert the right of democratic societies to determine their own future,” she declared, suggesting that “audit authority” should be the guiding principle for regulators.

She added that democracy requires audit authority to protect citizens, mirroring the safeguards already in place across numerous other industries.

The Google-Fitbit acquisition was brought up in a question posed to Vestager yesterday during a session of the Committee on Economic and Monetary Affairs – where she was asked about the EU’s plans concerning health data and competition, given the potential for tech giants to acquire significantly more detailed and personal user information than currently possible through existing data-mining techniques.

Vestager informed the committee that she could not comment on the specific merger due to the ongoing process but affirmed that she agreed health data “are considerably more valuable and more sensitive” than other forms of commercially utilized data.

“Therefore, extreme caution is necessary when dealing with health data and advertising – as it can place individuals in a particularly vulnerable position,” she explained.

“Regarding health data in general, I believe it’s crucial for the market to evolve because as more health data becomes available, people will expect more services from the market to help them better understand their health,” she continued, adding specifically about Google-Fitbit that “the effectiveness of any proposed remedies remains to be seen if they are accepted”.

U.S. versus EU approach to antitrust

During the discussion, Vestager addressed inquiries from Members of the European Parliament (MEPs) regarding the contrasting approaches to antitrust regulation between the EU and the United States, particularly in light of the recent substantial antitrust action initiated against Facebook by U.S. states.

She consistently emphasized that Europe employs a “distinct” method concerning competition law compared to the U.S., occasionally appearing somewhat defensive in her explanation.

“The antitrust case brought forth in the U.S. regarding Facebook represents a different strategy than our own. Within Europe, we do not prohibit monopolies outright. The U.S. operates under a different legal framework. Our position is that achieving success is permissible, but that success carries with it a corresponding responsibility – a principle embodied in article 102 [which addresses the abuse of a dominant market position],” she explained.

“As a final measure within Europe, we possess the authority to request the separation of companies; however, we would first need to demonstrate that such a division is the sole solution to a competition issue, and we have not yet reached that point,” Vestager further stated.

In response to additional questions from MEPs, she affirmed that her department is diligently pursuing numerous investigations into major technology companies, referencing the recently launched case against Amazon and ongoing inquiries into Google’s and Facebook’s data utilization practices for advertising purposes.

“We currently have several investigations underway concerning the Facebook ecosystem – specifically focusing on the use of customer and consumer data in advertising and the operational dynamics of the Facebook Marketplace,” she pointed out.

“While these cases are not as far along as the one in the U.S. concerning Facebook, I view [the U.S. action] as a positive development,” she added, noting that it signifies a “shift in the global conversation surrounding the dominance of technology companies over the past few years”.

Regarding Facebook’s retraction of a previous commitment not to integrate Facebook and WhatsApp user data, Vestager stated that EU regulators had conducted an assessment at the time – evaluating whether such a move would still allow for competitive alternatives – and “determined that space would remain for other comparable services”.

The event’s format did not allow for follow-up questioning, preventing MEPs from inquiring whether Vestager believes this prior analysis was accurate or contained shortcomings. Nevertheless, it is unfavorable that the EU’s competition authorities were caught unprepared regarding Facebook’s market influence.

Without prompting, Vestager simply remarked: “The outcome of the U.S. [Facebook antitrust] case remains to be seen; as I mentioned, they are operating under a different legal basis – to determine if the acquisition of this company has solidified a monopolistic position.”

She was also questioned about the Commission’s plans to address companies employing delaying tactics to prolong investigations (and thus postpone competition enforcement) – such as through procrastination or the delayed submission of requested information.

Vestager explained that their strategy is to “consistently strive for balance,” but she maintained that it is crucial to provide businesses with sufficient time to formulate comprehensive responses, even if it extends the duration of investigations.

During the session, she also highlighted that the objective of the Digital Markets Act (DMA) is to empower competition authorities to act “much more swiftly” – as the ex ante rules will incorporate “self-executing obligations”.

The designation of “gatekeeper” status also implies that regulators will not need to first establish dominance – “which translates to reaching sanctions more quickly and preventing harm within the marketplace”, she observed.

It is currently uncertain whether the upcoming legislative package will include a new competition instrument specifically designed for addressing digital markets – a topic on which the Commission sought feedback earlier this year.

Reports suggest this possibility has been abandoned following a standard EU pre-regulatory review process. However, the commissioner neither confirmed nor denied this.

She was also asked about interim measures – a tool she reactivated last year after a prolonged period of inactivity, applying it in a case involving chipmaker Broadcom.

On this point, she stated that the tool has proven effective – noting that the Broadcom case was resolved within a year (a remarkably fast resolution for a competition case) – and she indicated that the tool could be utilized more frequently in the future. “I anticipate that we will find opportunities to employ it more often,” she informed the MEPs.