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There was a time, when internet was making inroads, that technology was the flavour of the day. Technology companies which started during that era became market leaders and, for long, they were revered and their actions went, virtually, unchecked. This reverence was owing to the extent to which they made our lives easy but, it was for this reason, that they pervaded nearly every facet of our existence.
Internet comprises of the free flow of data and personal information in the digital world. These technology companies strive on data and, because of their widespread acceptance, it provided them with immeasurable amount of power and influence and data became the new gold. However, while they were supposed to maintain the sanctity of their loyal customer base, the power and influence which they possessed, caused them to compromise the personal data of users for their monetary gains. One such tech giant is Google, one arm of whose business strategy is sharing personal data of consumers for business advertisements.
Google and Facebook became the leading market players in the world of search engines and social networking and, as part of their expansion, acquired many smaller players around them, both to eliminate competition and to spread their wingspan. But, as they say, the actions we do today have ramifications tomorrow. For the longest time, their influence went unhinged and they freely compromised the privacy of their users by sharing the personal data for their commercial gains. However, now, nearly all jurisdictions have enacted their respective data protection laws and regulators across the world have started to take note thereof and have begun to rein in the unruly horse which is, primarily, aimed to prevent the personal data of the customers from being compromised.
FITBIT’S ACQUISITION :
Among many relatively small players, one such player is Fitbit. This company was started in 2007 in the USA and it makes wearables which allow users to track their fitness parameters. In the 13 years of its existence, Fitbit has become a force to be reckoned with and has pioneered the fitness wearable market. Over the course of time, it gained popularity and became a respected name in its field of operation and, as such, it was no surprise that Google trained its eyes on the brand to bring it under its banner and the process of acquisition started.
Google valued the brand at USD 2.1 Billion and, after undertaking requisite legal formalities, Fitbit is now, formally, a part of Google.
GOOGLE’S REGULATORY TRAVAILS :
This article is not about the process of acquisition but is about the regulatory roadblocks which have been erected in the corporate journey which was, hitherto, taken for granted. This deal could easily sail through but, given the notoriety Google, among other leading companies, suffers from when it comes to dealing with personal data of its users, it was not going to be a smooth ride. European Union acts as a gold standard when it comes to regulatory mechanism to protect the rights of its citizens and, this time too, it came forward and subjected Google to the rigours of its regulations.
Although, European Union (EU) approved the acquisition as a whole, the same was subject to a condition. To prevent Google from going about its usual business practice with Fitbit as well, EU put forth a condition that Google will not use the data collected from Fitbit users in the EU for ad targeting for a period of 10 years. It was, indeed, a blow to the company as ad targeting comprises a major part its commercial activities. However, this was the only choice for the company in order to secure the deal.
Apart from EU, Google was made to enter into binding commitments with other global regulators also and the company assured that it would keep the health and wellness data collected from Fitbit users separate from other Google data.
Recently, the CEO of Fitbit, Mr. James Park, also issued a statement, thereby, assuring the users that, although a part of Google, Fitbit would not allow the data of its users to be used for ad targeting and that this data would be separate from other Google data. Hopefully, Fitbit does not go the Whatsapp way and succumb to pressures later on.
Given its pervasive nature, the influence these companies wield is scary. In view of recent suspension of social media accounts of former US President, Mr. Donald Trump, the world is abuzz with discussions about the immense power these companies possess.
This action on the part of regulators demonstrates that, howsoever huge a corporate entity may be, it cannot soar higher than the might of the State and rights of its citizens. It was high time the free run of tech giants was arrested to restore the sanctity of one of the most basic rights of people – their privacy. The global citizens, sincerely, hope that this trend continues and regulators across jurisdictions come together to establish system and restore adequate and healthy competition in the market.
Authored by Siddharth Jain, Co-Founding Partner, PSL Advocates & Solicitors