Summary of Commission Decision of 17 December 2020 declaring a concentration compatible with the internal market and the functioning of the EEA Agreement (Case M.9660 – Google/Fitbit) (notified under document C(2020) 9105) (Only the English version is authentic) (Text with EEA relevance) 2021/C 194/05
Date: 2020-12-17
Institutions: Directorate-General for Competition, European Commission
Subjects: advanced technology industry, clock and watch industry, economic concentration, electronic device, information technology industry, merger control, mobile communication, multinational enterprise, new technology, search engine








C_2021194EN.01000701.xml










21.5.2021   


EN


Official Journal of the European Union


C 194/7






SUMMARY OF COMMISSION DECISION
of 17 December 2020
declaring a concentration compatible with the internal market and the functioning of the EEA Agreement
(Case M.9660 – Google/Fitbit)


(notified under document C(2020) 9105)


(Only the English version is authentic)
(Text with EEA relevance)
(2021/C 194/05)

On 17 December 2020 the Commission adopted a Decision in a merger case under Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (1)
, and in particular Article 8(2) of that Regulation. A non-confidential version of the full Decision, as the case may be in the form of a provisional version, can be found in the authentic language of the case on the website of the Directorate-General for Competition, at the following address:


https://ec.europa.eu/competition/index_en.html

1.   INTRODUCTION









(1)


On 1 November 2019, Google announced that it will acquire control of Fitbit. The transaction was notified to the Commission on 15 June 2020.












(2)


By Decision dated 4 August 2020, the Commission found that the proposed transaction raised serious doubts as to its compatibility with the internal market and initiated proceedings pursuant to Article 6(1)(c) of the Merger Regulation (‘the decision opening proceedings’).












(3)


The Decision was consulted with the Member States during the Advisory Committee on Concentrations on 1 December 2020, which provided a favourable opinion. The Hearing Officer provided its favourable opinion on the proceedings in his report which was submitted on 4 December 2020.




2.   THE RELEVANT MARKETS









(4)


The Decision identifies the following relevant markets:






(a)


Wrist-worn wearable devices, potentially further segmented between (i) fitness trackers and smartwatches, (ii) fitness trackers and smartwatches with and without GPS connectivity, (iii) smartwatches with and without cellular connectivity, and (iv) basic and full smartwatches. The geographic scope is at least EEA-wide if not worldwide.










(b)


OSs: (i) the supply of licensable OSs for smart mobile devices, and (ii) the supply of licensable OSs for wrist-worn wearable devices, potentially segmented along the lines of the potential segments of the market for wrist-worn wearable devices listed in the previous paragraph. The geographic scope of the market for licensable OSs for smart mobile devices is worldwide excluding China, while the geographic scope of the market for licensable OSs for wrist-worn wearable devices is at least EEA-wide if not worldwide excluding China.










(c)


App stores: (i) the supply of app stores for a given OS platform of smart mobile devices (in particular Android app stores), and (ii) the supply of app stores for a given OS platform of wrist-worn wearable devices (in particular app stores for Wear OS and Fitbit devices). The geographic scope of markets for app stores for a given OS platform of smart mobile devices (e.g. Android app stores) and of wrist-worn wearable devices (e.g. Wear OS and Fitbit app stores) is worldwide excluding China.










(d)


General search services. The geographic scope of the market for the supply of general search services is national.










(e)


Online advertising: (i) the supply of online search advertising services, potentially segmented in the supply of online search advertising services on desktops or on mobile apps, and (ii) the supply of online display advertising services, potentially segmented in the supply of online display advertising services on desktops or on mobile apps, the supply of online display advertising services on- and off-social networks, the supply of online display video or non-video advertising services. The geographic scope of the identified markets is national alongside linguistic borders within the EEA.










(f)


Ad tech services: (i) the supply of SSP services, (ii) the supply of DSP services, (iii) the supply of search ad network services and display ad network services, (iv) the supply of ad server services, and (v) the supply of analytics services. The geographic scope of the identified markets is at least EEA-wide.










(g)


Health and fitness apps, potentially further segmented by functionality and platform (PC, smart mobile or wrist-worn wearable device). The geographic scope of the identified markets is at least national.










(h)


Mobile payments services, potentially further segmented between (i) proximity/offline mobile payments, and (ii) remote/online mobile payments (including or not payment intermediation services) as well as segmented based on the platform used (smart mobile or wrist-worn wearable device). The geographic scope of the identified markets is at least national.










(i)


Other digital apps and services: (i) navigation apps offering turn-by-turn navigation, (ii) virtual assistants, (iii) digital music distribution services, and (iv) digital translation services, with various possible segments. The geographic scope of the market for (i) navigation apps is at least EEA-wide if not worldwide and for (ii) virtual assistants, (iii) digital music distribution services and (iv) digital translation services at least national.










(j)


Digital healthcare: (i) provision of cloud and data analytics services, (ii) patient monitoring services, (iii) provision of data for medical research and real-world evidence, and (iv) corporate wellness programmes. The geographic scope of the market for (i) the provision of cloud and data analytics services is at least EEA-wide, (ii) patient monitoring services is at least EEA-wide if not global, (iii) provision of data for medical research and real-world evidence is at least EEA-wide, (iv) corporate wellness programmes is at least EEA-wide.








3.   COMPETITIVE ASSESSMENT









(5)


The Commission assessed the horizontal effects of the Transaction on databases (and data collection capabilities), that is Fitbit as source of user data for possible use in (i) online advertising services, (ii) general search services, and (iii) digital healthcare services. Otherwise, there are no horizontally affected markets arising from the Transaction.












(6)


In addition, the Transaction creates vertical relationships between Google’s and Fitbit’s activities. The Commission assessed the vertical effects of the Transaction as regards possible foreclosure from access to Fitbit user data to the detriment of digital healthcare players, foreclosure from access to Wear OS to the detriment of wrist-worn wearable suppliers, foreclosure from access to Google’s apps/services to the detriment of wrist-worn wearable suppliers, foreclosure from access to Google Play to the detriment of wrist-worn wearable suppliers, and foreclosure from access to Fitbit App Gallery to the detriment of wrist-worn wearable suppliers.












(7)


The Transaction also creates conglomerate relationships between Google’s and Fitbit’s activities. The Commission assessed the conglomerate effects of the Transaction as regards leveraging of Google’s position in Android OS into the wrist-worn wearables market.












(8)


Finally, the Commission assessed possible concerns stemming from Google’s access to commercially sensitive information.




3.1.   Horizontal effects









(9)


While the Transaction does not give rise to any horizontally affected markets in a traditional sense with regard to databases and data collection capabilities, the Commission considers that the Transaction will combine under the ownership of Google the databases (and data collection capabilities) of the Parties.












(10)


The Commission has examined whether, the combination of Fitbit’s and Google’s data (and data collection capabilities) could give rise to anticompetitive horizontal non-coordinated effects by strengthening Google’s market position in the supply of (i) online search and display advertising services and ad tech services, (ii) general search services, or (iii) digital healthcare services.












(11)


Based on the approach adopted in Apple/Shazam (2), the Commission notes that there are certain legal limitations to combining datasets such as the applicable EU rules dealing with data protection, and most notably to the General Data Protection Regulation (‘GDPR’) and the Union rules dealing with privacy and the protection of the confidentiality of communications, notably the e-Privacy Directive.












(12)


The Commission considers that, although pre-Transaction Fitbit is not competing in the same markets as Google, the Transaction would give Google control over an important asset, i.e., the Fitbit data, that would further strengthen Google’s dominance in the markets for the supply of online search advertising services. (3) The Commission maintains its concerns, as set out in the Article 6(1)(c) decision, as to the compatibility of the Transaction with the internal market relating to a strengthening of Google’s dominant position in the supply of online search advertising (and possible segments thereof), the supply of online display advertising markets (and possible segments thereof), as well as in the market for ‘ad tech’ services.












(13)


In the Commission’s view, such concerns would exist in view of: (i) the relevance of the data (and data collection capabilities) acquired by Google as a result of the Transaction for serving and displaying ads, (ii) Google’s position in the relevant markets related to the supply of online search advertising services, and sub-markets/segments thereof, (iii) the strengthening of Google’s market position and impairment of rivals’ expansion in the mentioned markets as a result of the data combination, and (iv) the absence of countervailing entry or buyer power.












(14)


In relation to online display advertising services and possible sub-segments, as well as ‘ad tech services’, the Commission considers that despite holding some degree of market power, Google’s position in these markets is significantly weaker than on the markets for online search advertising based on Google’s market shares and the fact that it cannot be excluded that the market for online display advertising is characterised by the existence of barriers to entry and expansion and the lack of countervailing buyer power.












(15)


The Commission considers that the Transaction will not likely lead to any significant impediment of effective competition as a consequence of the possible horizontal effects arising from the combination of Google’s and Fitbit’s user databases and data collection capabilities for use in the field of general search services. Google has been found to hold a dominant position in each national market for the supply of general search services since 2008, apart from in the Czechia, where Google holds a dominant position since 2011. However, the results of the market investigation suggest that Fitbit data, despite being potentially a valuable input in the markets for general search services, is less relevant for general search than it is in the case of online search ads targeting.












(16)


As regards Fitbit as a source of data for possible use in digital healthcare services, the Commission considers that the Transaction will not likely lead to any significant impediment of effective competition as a consequence of horizontal effects arising from the combination of Google’s and Fitbit’s user databases and data collection capabilities. This is because the Parties are neither actual nor potential competitors in the collection or marketing of user health and fitness data. As regards actual competition, neither party is currently marketing their user data, but the circulation of data is a consequence of the users’ decision to actively share them with third parties (apps and websites) that offer value added services to them. As regards potential competition, the Commission assessed the impact of the Transaction, by investigating the rationale of the Transaction and considering the current status of the market for digital healthcare services. In those respects, the Commission established that digital health was clearly not the main deal rationale of the Transaction and that there are multiple players active in digital healthcare (in particular in cloud and data analytics, patient monitoring services, provision of data for medical research and real-world evidence and corporate wellness programmes where one of the Parties is active).




3.2.   Vertical effects

3.2.1.   Foreclosure from access to Fitbit data to the detriment of digital healthcare players (input foreclosure)









(17)


The Commission considers, based on the results of the market investigation, that it cannot be excluded that post-Transaction Google may have the technical ability to engage in input foreclosure by restricting the access to the Web API. While, in general terms, user health data are available from a number of data sources, the user data of Fitbit’s users are only available through the Web API and a number of players in digital healthcare access such data through the Web API, in order to provide services to Fitbit users and obtain their data in return.












(18)


Furthermore, based on the results of the market investigation, the Commission considers that it cannot be excluded that, after the Transaction, Google will have the incentive to restrict access to the Fitbit Web API.












(19)


Restricting access to Fitbit’s Web API post-Transaction may have an impact on the success of start-ups. In addition, the Commission notes that, should access to the Web API be restricted or discontinued, at least a part of Fitbit users will lose access to at least one app that might be very desirable to them.












(20)


Therefore, the Commission maintains its concerns, as set out in the Art. 6(1)(c) decision, as to the compatibility of the Transaction with the internal market as a result of input foreclosure of providers of digital healthcare services caused by the merged entity restricting those providers’ access to the Web API and, therefore, their access to the data of Fitbit’s users..




3.2.2.   Foreclosure from access to Wear OS to the detriment of wrist-worn wearable suppliers (input foreclosure)









(21)


The Commission concluded that post-Transaction Google will not have the ability to stop or degrade access to Wear OS for downstream competitors of Fitbit. The Commission considers that the largest suppliers of smartwatches are fully vertically integrated, i.e. their smartwatches run solely on their own (proprietary) OSs. In addition, Wear OS devices’ market share in the downstream market for supply of smartwatches has constantly declined over the past three years, reaching a level of below or close to 5%. Wear OS therefore accounts for only a small share of wrist-worn wearable devices sold to consumers today and it can be excluded that Wear OS is a critical component or significant source of product differentiation.












(22)


The Commission considers that Google would not have the incentive to engage in an input foreclosure strategy with regard to Wear OS and the Transaction will not significantly change Google’s incentive and Google will continue to aim for the widest possible distribution of Wear OS. This is because Fitbit only has a small market share in the growing smartwatches segment. Furthermore, Google benefits from licensees’ use of Wear OS by keeping users in the Android ecosystem.












(23)


Regardless of whether Google has either the ability or the incentive to foreclose competing downstream rivals with regard to the supply of Wear OS, such strategy would be unlikely to have any material impact on competition (only about [5-10]% of all smartwatches worldwide integrated Wear OS in 2019).




3.2.3.   Foreclosure from access to various Google apps to the detriment of wrist-worn wearable suppliers (input foreclosure)









(24)


The Commission considers that Google would not have the ability to engage in an input foreclosure strategy. The Commission notes that Google’s apps have clearly not been an important input for wrist-worn wearable devices in the past. None of Google’s apps (Google Search, Google Assistant, Google Fit, Google Play, Google Play Music and its successor YouTube Music, Google Maps, Google Translate) are currently available on devices other than those running on Wear OS or have only very recently become available on the Apple Watch.












(25)


The Commission considers that Google would not have the incentive to engage in an input foreclosure strategy with regard to Google apps post-Transaction. This is because (i) Fitbit only has a small market share in the growing smartwatches segment, (ii) Google benefits from licensees’ use of its apps, (iii) the extent to which Google would have developed the Google apps for third-party platforms absent the Transaction remains unclear, and (iv) based on Google observed strategy in the smart mobile device sphere, the Commission expects that Google will push its Google apps rather than foreclose them once competing wearable platforms have reached a sufficient size.












(26)


Regardless of whether Google has either the ability or the incentive to foreclose competing downstream rivals with regard to the supply of Google apps, such strategy would be unlikely to have any material impact on competition. The most popular smartwatches today do not run on Wear OS and hence do not currently have access to Google apps. Even if Google apps become relatively more important in the next two to three years, it is unlikely that their importance increases to such an extent that a hypothetical foreclosure strategy would foreclose wearable rivals.




3.2.4.   Foreclosure from access to Google Play to the detriment of wrist-worn wearable suppliers (input foreclosure)









(27)


The Commission considers that the merged entity would have the partial ability to engage in a foreclosure strategy with regard to Google Play. (4) In Google Android, Google has been found dominant in the supply of Android app stores in a worldwide market (excluding China) between 2011 and 2016 and there is no indication that it would be appropriate to take a different view in the case at hand. While respondents to the market investigation consider that wearable OEMs do not have effective counterstrategies, the Commission notes that Android platform offers multiple distribution channels. This is because (i) Android OEMs can preinstall wearable companion apps on mobile devices and thus ensure the availability of those apps to users, (ii) companion apps also can be distributed through app stores other than Play, including first-party (i.e., OEM) and third-party app stores, and (iii) even if certain Android OEMs do not preinstall their companion app or do not offer an alternative app store today, they could start using these strategies in case Google started implementing a foreclosure strategy.












(28)


In any case, the Commission notes that competition rules, in particular Article 102 TFEU and Article 54 of the EEA Agreement will continue to apply to the merged entity post-Transaction, regardless of the outcome of the present assessment under the Merger Regulation.












(29)


As regards incentives, the Commission considers that it is unlikely that Google would implement a foreclosure strategy via the Play Store. This is because (i) at least Android smartphone OEMs could circumvent any kind of foreclosure strategy by preinstalling their companion apps and/or using their own app store and the effect would thus be limited to non-integrated wearable OEMs, and (ii) more limited foreclosure strategies (e.g., deteriorating rival wearables’ companion app’ rating and/or positioning within the Play Store or delaying their approval in case of updates or new releases) are unlikely to have a significant effect on user switching. In addition, in terms of reputation effects, the most effective foreclosure strategy (i.e., refusal to access Google Play) is likely to be observable by authorities, app developers and users.












(30)


Regardless of whether Google has either the ability or the incentive to foreclose competing downstream rivals with regard to the supply of Wear OS, the Commission considers that a foreclosure strategy in relation to Google Play would not have significant impact on competition as it would not significantly reduce the sales prospects of Fitbit’s wearable competitors.




3.2.5.   Foreclosure from access to Google Search to the detriment of wrist-worn wearable suppliers (input foreclosure)









(31)


The Commission considers that, in spite of Google is dominance in the market for general search services (5), post-Transaction the merged entity would not have the ability to foreclose competing wearable device manufacturers by discriminating in favour of Fitbit in Google Search results. The three major distribution channels for wearable devices are brick-and-mortar stores (physical stores), online sales via resellers’ websites, and online sales via the OEM’s own websites. Based on the results of the market investigation, sales in brick-and-mortar stores were the most important distribution channel, resellers’ websites the second most important distribution channel) and online sales via wearable OEMs’ own website account only for a small share of sales. The Commission considers that even for this distribution channel Google Search traffic is not very important.












(32)


The Commission considers that post-Transaction Google would not have the incentive to discriminate in favour of Fitbit in Google Search results. While by discriminating against Fitbit’s competitors in Google Search results, Google is indeed likely to increase the sale of Fitbit wrist-worn wearable devices, the potential expansion of its market share in wrist-worn wearable devices and the associated gains are likely to be very limited due to the small relevance of Google Search for sales of wrist-worn devices. Several factors indicate that Google would suffer substantial losses from discriminating Fitbit’s competitors in Google Search results. In particular, such a strategy would interfere with Google’s search algorithm.












(33)


Regardless of whether the merged entity has either the ability or the incentive to denying access to Google Search results to competing wearable OEMs, the Commission considers that such a strategy would not have any material impact on competition. This is because sales in physical stores and via online resellers are wearable OEMs’ most important distribution channels and sales through wearable OEMs’ own websites constitute the least important distribution channel.




3.2.6.   Foreclosure from access to Fitbit app stores to the detriment of app developers (input foreclosure)









(34)


As regards ability, the Commission considers that since the Fitbit App Gallery is the exclusive app store for Fitbit wearable devices, Fitbit has a 100 % share of Fitbit wearable device app stores. However, the Commission considers that, under any reasonable market definitions for apps, the Fitbit App Gallery is not an important input for third-party app developers. Therefore, post-Transaction the merged entity would not have the ability to foreclose competing app developers by denying access to the Fitbit Gallery.












(35)


As regards incentives, by limiting access to competing apps to Fitbit devices, Google is indeed likely to increase the use of its apps by Fitbit users. However, the potential expansion of its market shares in Google apps and the associated gains are likely to be very limited. This is because (i) the use of apps on wearable devices is limited, (ii) the use of Google apps on Fitbit devices would account for only a small share of overall use of apps on wearable devices, and (iii) if competing apps are foreclosed, it is not clear that this will lead to an equivalent increase in the use of apps provided by Google. Several factors indicate that Google would suffer substantial losses from denying access to Fitbit wearables to competing apps, mainly because limiting access to competing apps would make Fitbit wearables relatively less attractive to customers.












(36)


Regardless of whether the merged entity has either the ability or the incentive to denying access to Fitbit wearables to competing app developers, the Commission considers that such strategy would not have any material impact on competition. Foreclosing competing app developers from the Fitbit App Gallery would only affect a small fraction of market output and would therefore not have any material impact on competition.




3.3.   Conglomerate effects

3.3.1.   Leveraging of Google’s position in Android OS into the wrist-worn wearables market









(37)


The Commission considers that the merged entity would have the ability to engage in a foreclosure strategy with regard to Android for the following reasons: (i) there is a large pool of common customers of Android smartphones and Android-compatible wearable devices (excluding only users of Apple products, i.e. iPhone and Apple Watch or iPhone paired with a third-party wearable device), (ii) Google controls Android and has a dominant market position in the supply of licensable OS for smart mobile devices, (iii) while a degradation does not seem possible under the current Android business model, Google has control over Android and could change its business model, and (iv) Google could prevent attempts of Android smartphone OEMs to circumvent a degradation.












(38)


In particular, the Commission considers that Google could degrade the Android APIs offered to third party OEMs, reserving certain functionalities only for its own wrist-worn wearable devices. The Commission considers that Google could find technical or contractual means to implement a degradation. Alternatively, Google could continue to include current functionalities in Android Open Source Project (‘AOSP’), however, withhold any future developments from AOSP and implement such improvements in the proprietary layer for use by Fitbit.












(39)


The Commission considers that Android smartphone OEMs have very limited counterstrategies available, which do not prevent Google’s ability to pursue a degradation strategy. That is because even if OEMs were technically able to reverse an API degradation, Google could ultimately prevent OEMs from using the forked Android version as OEMs would stand to lose access to GMS, including Google’s suite of mobile apps.












(40)


The Commission considers that Google shows the incentive to degrade interoperability with regard to Android because: (i) Google would not necessarily incur reputational damage, (ii) the quantification submitted by the Notifying Party, based on a standard vertical arithmetic framework, does not convincingly show that a degradation strategy would be unprofitable for Google. Based on the results of the market investigation, the Commission considers that there may be further elements which could increase Google’s incentive. For example, Google could use Fitbit devices to distribute its apps and services, thereby increasing the gains from additional Fitbit sales.












(41)


The Commission considers that a degradation strategy could have significant impact on competition by reducing the sales prospects of Fitbit’s wearable competitors.












(42)


Therefore, the Commission maintains its concerns, as set out in the Article 6(1)(c) decision, as to the compatibility of the Transaction with the internal market relating to Google’s leveraging of its dominant position in the supply of licensable OSs for smart mobile devices to the market for the supply of wrist-worn wearable devices (and possible sub-segments thereof).




3.4.   Access to commercially sensitive information









(43)


The Commission also assessed the effects of the Transaction on access to commercially sensitive information (as Fitbit allows its users to connect their Fitbit accounts with a number of third-party apps, Fitbit might then be able to gain access to additional information on the respective third-party apps) and whether this could lead to any non-horizontal non-coordinated anticompetitive effects.












(44)


The Commission concluded that post-Transaction the merged entity would likely have neither the ability nor the incentive to significantly impede effective competition with competing third-party apps as a result of any access to commercially sensitive information and that, in any event, the effects of such a strategy would not be significant.




4.   UNDERTAKINGS SUBMITTED BY THE PARTIES









(45)


In order to remove the competition concerns arising from the Transaction, the Notifying Party submitted commitments both in Phase I and in Phase II.












(46)


The Commitments comprise three elements:






a)


A commitment not to use any measured body data or health and fitness activity location data for advertising purposes and to maintain data separation (the ‘Ads Commitment’);










b)


A commitment to maintain access for third parties, subject to user consent and without charge for access, to a series of measured body data (the ‘Web API Access Commitment’);










c)


A commitment to continue to license free, public APIs allowing interoperability between third-party wearable devices and the Android operating system on smartphones, offering at least the core functionalities of the APIs that exist as of the effective date in the Android operating system (the ‘Android APIs Commitment’).








4.1.   Initial Commitments

4.1.1.   Ads Commitment









(47)


By the Ads Commitment, Google commits, for ten years following the Commission’s approval of the Concentration (i) not to use any Measured Body Data or Health and Fitness Activity Location Data for Google Ads, and (ii) to maintain the auditable holding separate of Measured Body Data and Health and Fitness Activity Location Data from any dataset within Google accessible for use by Google Ads.












(48)


The Ads Commitment was originally submitted in Phase I. The Commission concluded that even if, conceptually, a commitment envisaging the creation of a silo for storage of data subject to strict access rules could be suitable to solve the competition concerns identified by the Commission, it was still unclear if in practice the Phase I commitment would be effective in removing the serious doubts identified in the opening decision, for the following main reasons: (i) it was unclear whether the scope of the data protected by the Data Silo Commitment was sufficient; (ii) the definition of ‘Google Ads’ was too narrow; (iii) the details of the data protection system were insufficient for the Commission to be able to assess the effectiveness of the Data Silo Commitment; and (iv) the duration was insufficient. The Ads Commitment submitted in Phase II contains improvements in all four respects.




4.1.2.   Web API Access Commitment









(49)


By the Web API Access Commitment, Google commits, for five years following approval of the Concentration, to maintaining access for API Users, subject to user consent and without charge for access, to Supported Measured Body Data, subject to:






(1)


API Users’ continued compliance with the Fitbit Platform Terms of Service (where access is made available via the Fitbit Web API) or the Terms of Service and the Services User Data Policy (where access is made available via a Relevant Google API). Google can terminate access for violation of these terms; and










(2)


API Users’ continued compliance with the Privacy And Security Requirements. Google can terminate access for violation of these requirements or temporarily suspend access where Google has a reasonable belief of violations of such requirements.








4.1.3.   Android APIs Commitment









(50)


By the Android API Commitment, Google commits, for ten years following the Commission’s approval of the Concentration, to:






(1)


Continue to license free, public APIs to Android OEMs offering core functionalities that Wrist-Worn Wearable Devices may use to interoperate with an Android Smartphone;










(2)


Make those APIs available without differentiating their availability or functionality depending on whether they are accessed by a First-Party Wrist-Worn Wearable Device or Companion App or a Third-Party Wrist-Worn Wearable Device or Companion App;










(3)


Not to degrade those APIs so as to reduce their functionality to Third-Party Wrist-Worn Wearable Devices relative to First-Party Wrist-Worn Wearable Devices; and










(4)


Continue to make publicly available, for free, Developer Documentation relating to those APIs.








4.2.   Revised Phase II Commitments









(51)


The Revised Phase II Commitments comprise the same three elements as the initial Phase II Commitments with the following improvements.




4.2.1.   Ads Commitment









(52)


Definitions: a series of definitions have been amended and refined mainly to avoid circumvention and to ensure future-proofness of the Ads Commitment;












(53)


Monitoring: the role of the Monitoring Trustee in the verification of the technical measures put in place to comply with the Data Separation has been clarified and improved;












(54)


Opt-in: EEA Users will be presented the choice to grant or deny use by Google Services other than Google Ads of any Measured Body Data;












(55)


Duration: the Commission may decide to extend the duration by up to an additional ten years having justified the necessity for such an extension during the final year of the initial ten year period.




4.2.2.   Web API Access Commitment









(56)


Definitions: a series of definitions have been amended and refined mainly to avoid circumvention and to ensure future-proofness of the Web API Access Commitment;












(57)


Future-proofness: the Commitment includes an Update Mechanism to replicate what Fitbit would have done on a standalone basis. Based on the Update Mechanism, new data types will be shared through the Web API within one to two years if they qualify as Supported Measured Body Data and at least 3 of the 5 largest wearable OEMs make available an equivalent data type;












(58)


Ex-ante review of Google’s and Fitbit’s terms and conditions by Monitoring Trustee: Google must notify proposed amendments ten days before they become effective or, in case such changes are urgent, as soon as possible and no later than five days from that date;












(59)


Scope of data: the Web API Access also covers data of non-EEA Users for any API User that has an application or website made available to EEA Users;












(60)


Duration: extended from 5 to 10 years.




4.2.3.   Android APIs Commitment









(61)


Definitions: a series of definitions have been amended and refined mainly to avoid circumvention and to ensure future-proofness of the Android APIs Commitment;












(62)


Scope: the list of core functionalities has been extended according to market participants’ feedback and it has been clarified that the Commitment also includes improvements, including as a result of updates and bug fixes;












(63)


Future-proofness: no discrimination against wrist-worn wearable device OEMs (i) by withholding, denying, or delaying access to functionalities of Android APIs (AOSP or Google Mobile Services) that Google makes generally available, without charge for access, to other Android smartphone app developers as well as no discrimination in relation to (ii) changing, replacing, or retiring these Android APIs, (iii) access to Developer Previews, and (iv) access to Developer Documentation;












(64)


Circumvention: no circumvention via (i) Google Play Store, or (ii) error/warning messages.




4.3.   Assessment of the undertakings submitted









(65)


The Commission considers that, in order to be acceptable, the proposed commitments must be capable of rendering a concentration compatible with the internal market as they prevent a significant impediment to effective competition in all relevant markets in which competition concerns were identified. In this case, the commitments needed to eliminate the competition concerns identified by the Commission, namely with respect to: (i) supply of online search advertising services in different EEA countries and the UK, (ii) the digital healthcare markets in the EEA countries and the UK, and (iii) interoperability with Android OS.












(66)


The Decision concludes that the Final Commitments address the competition issues raised by the Transaction in their entirety. The Commission also concludes that the Final Commitments are capable of being implemented effectively within a short period of time.





CONCLUSION

For the reasons mentioned above, in the Decision the Commission concluded that, subject to compliance with the commitments given by the Notifying Party, the Transaction would not significantly impede effective competition in the internal market or in a substantial part of it. Consequently, the Decision declares the concentration compatible with the internal market, in accordance with Articles 2(2) and Article 8(2) of the Merger Regulation and Article 57 of the EEA Agreement.


(1)  OJ L 24, 29.1.2004, p. 1.

(2)  Commission decision of 6 September 2018 in case M.8788 – Apple/Shazam, recitals 225-235.

(3)  In accordance with to paragraph 36 in the Horizontal Merger Guidelines, a merger can significantly impede effective competition if the merged entity gains such a degree of control over an asset that expansion or entry by rival firms may be more difficult. In the case at hand, such an assets is Fitbit’s data.

(4)  Google Play is the Android app store offered by Google, which Google has offered since 2008. The Play Store is part of Google Mobile Services (‘GMS’), the bundle of Google apps and services that Google licenses together.

(5)  With a market share of above 90% in almost all EEA countries in 2019, except for Czechia (84.4%), Google is dominant in the market for general search services.