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EU signals deeper investigation of Google Fitbit deal – Financial Times

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The EU is examining whether Google’s proposed $2.1bn takeover of the fitness-tracking company Fitbit will give the company more data to entrench its search engine and advertising businesses, as consumer groups called for the deal to be blocked.

EU regulators have sent two questionnaires, adding up to around 60 pages, asking Google and Fitbit’s rivals whether the deal will damage competition, disadvantage other fitness tracking apps in Google’s Play Store, or give Google more profiling data to improve its online search and advertising businesses.

The questionnaires also ask rivals to assess the impact of the deal on Google’s growing digital healthcare business.

Separately, 20 consumer groups, including Europe’s umbrella consumer organisation BEUC and the Consumer Federation of America, issued a warning about the deal on Thursday.

“Regulators must assume that Google will in practice utilise the entirety of Fitbit’s currently independent unique, highly sensitive data set in combination with its own, particularly as this could increase its profits, or they must impose strict and enforceable limitations on data use,” they said, in a joint statement.

The detail of the questions posed by the EU suggests that Brussels is gearing up for an extended investigation and may block the transaction, according to people with direct knowledge of the situation.

The EU has until July 20 to make a decision after the end of the initial phase of the investigation, and could waive the deal, extend the investigation or ask for concessions.

The Australian Competition and Consumer Commission raised concerns last month that the deal could lead to a strengthening of Google’s position.

“Past acquisitions by Google, of both start-ups and mature companies like Fitbit, have further entrenched Google’s position,” said Rod Sims, the Australian watchdog’s chair, last month. “The access to user data available to Google has made it so valuable to advertisers that it faces only limited competition.” 

The Australian authority said it is looking into the “uniqueness and potential value” that Fitbit’s data would give Google. 

“The risk is that Google would extend its empire of consumer data also into vital medical data and digital medical services undergo some kind of consumerisation rather than being available to the wider medical community,” said an antitrust expert in Brussels with direct knowledge of the deal.

At the time the deal was announced, Rick Osterloh, senior vice-president for devices and services at Google, said the company “will be transparent about the data we collect and why. We will never sell personal information to anyone. Fitbit health and wellness data will not be used for Google ads. And we will give Fitbit users the choice to review, move, or delete their data.”

Google said: “Throughout this process we have been clear about our commitment not to use Fitbit health and wellness data for Google ads and our responsibility to provide people with choice and control with their data.

“Similar to our other products, with wearables, we will be transparent about the data we collect and why. And we do not sell personal information to anyone.”

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Facebook, Microsoft gripes with Apple's App Store on EU's antitrust radar – Kitco NEWS

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BRUSSELS (Reuters) – Facebook (FB.O) and Microsoft’s (MSFT.O) grievances over how their gaming apps appear on Apple’s (AAPL.O) App Store may feed into an EU investigation into the iPhone maker’s business as EU antitrust regulators said such concerns are on their radar.

The European Commission in June opened four probes into Apple, three of which are into its App Store and its restrictive rules, including requirements that app developers use its own in-app purchasing system.

U.S. social media giant Facebook and Microsoft are the latest companies to voice concerns about the rules, which have drawn criticism from app developers who say they create an uneven playing field to compete with the iPhone maker.

Asked about Facebook and Microsoft’s issues with Apple, Commission spokeswoman Arianna Podesta said in a statement: “The Commission is aware of these concerns regarding Apple’s App Store rules.”

She did not provide details.

Apple dismissed criticism of its App Store rules, saying that all apps are reviewed against the same set of guidelines whose aim is to protect customers and provide a fair and level playing field for developers.

Facebook last week said its gaming app was only available on Apple’s App Store as a streaming service and that users will not be able to play games.

Facebook Chief Operating Officer Sheryl Sandberg said the company had to remove gameplay functionality entirely to secure Apple’s approval of its Facebook Gaming app.

Microsoft, which has a game-streaming service called Project xCloud said: “Apple stands alone as the only general purpose platform to deny consumers from cloud gaming and game subscription services like Xbox Game Pass.”

“It consistently treats gaming apps differently, applying more lenient rules to non-gaming apps even when they include interactive content,” it added in an emailed statement.

Reporting by Foo Yun Chee; editing by Barbara Lewis

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Russia's antitrust watchdog finds Apple abused App Store 'dominance' – Engadget

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Chesnot via Getty Images

Potential action from US lawmakers may not be what forces Apple to change how it does business. Following a year-long investigation into the company, Reuters reports Russia’s Federal Antimonopoly Service (FAS) has found the iPhone-maker abused its dominant position in the mobile app marketplace and will order Apple to resolve multiple regulatory breaches. 

The agency started investigating the tech giant after developer Kaspersky Lab filed a complaint over the rejection of its Safe Kids app from the App Store. At the time, Apple said the software put “user’s safety and privacy at risk.” The agency ruled Apple forces developers to distribute to their apps through the App Store and then unlawfully blocks them. A spokesperson for Apple told Reuters the company plans to appeal the ruling. 

The decision comes as Apple faces increasing scrutiny over its gatekeeping of the App Store in both the US and EU. When Tim Cook testified before the House Judiciary Antitrust Subcommittee at the end of July, lawmakers asked the executive about the company’s decisions to block some competitors from its digital marketplace. Cook was also asked about the ongoing 30 percent cut the company takes from third-party app sales, a rate many developers argue is too high. Apple was again in the spotlight earlier this month after it said it would not allow Microsoft’s Project xCloud on iOS since its App Store guidelines require developers to submit games individually for review.

In this article:

Apple, antitrust, FAS, politics, iOS, App Store, news, gear
All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.

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WeChat ban ‘could cost Apple 30% of global sales’ – Asia Times

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A widely-followed Taiwanese stock analyst warns that Apple’s smartphone sales will fall by almost a third if the American giant removes WeChat from its app store under a US government directive.

Ming-Chi Kuo, an analyst with TFI Securities, wrote in an August 10 letter to clients that Chinese customers would shun the iPhone if the WeChat app were not available. China accounts for 30% of iPhone sales and 15% of Apple’s total revenue as of the second quarter of 2020. Kuo’s remarks were first reported by MacRumors, 9to5Mac and AppleInsider.

Kuo follows Apple for TFI Securities, a division of the Taiwanese firm China Development Financial, a banking and brokerage firm with annual revenues of almost US$7 billion. He warned clients in his Monday newsletter: “Because WeChat has become a daily necessity in China, integrating functions such as messaging, payment, e-commerce, social networking, news reading, and productivity, if this is the case, we believe that Apple’s hardware product shipments in the Chinese market will decline significantly. We estimate that the annual ‌iPhone‌ shipments will be revised down by 25-30%, and the annual shipments of other Apple hardware devices, including AirPods, iPad, Apple Watch and Mac, will be revised down by 15–25%.”

Kuo advised TFI’s customers to sell Apple stock along with companies in Apple’s supply chain, including LG Innotek and Genius Electronic Optical.

Apple stock was trading at US$455 at the New York opening before wire services reported Kuo’s recommendation. The stock fell to $442 as of 11 am, a decline of 2.6%.

WeChat’s parent company Tencent (HK 700) lost nearly 10% of its market capitalization on Friday and Monday in Hong Kong trading after President Donald Trump issued an executive order Thursday prohibiting all US transactions via WeChat. It isn’t yet clear whether the order will require Apple to remove the popular application from its platform in China, and Ming-Chi Kuo explained that his projection of a 30% sales drop was a worst-case scenario.

Apple depends heavily on foreign sales, while Tencent makes 96% of its revenues in Mainland China. WeChat has a relatively small following in the United States, mainly among Americans who communicate regularly with China. The steep fall in the company’s stock doesn’t appear justified by fundamentals. Under a worst-case scenario, the impact of the US ban on Tencent’s revenues would be negligible.

Uwe Parpart and I recommended buying Tencent on the dip in our August 8 Global Value Strategist.

In other news, Tencent this week proposed to merge two Chinese game streaming companies, DouYu International Holdings and Huya, Inc, to create a giant firm with a market value in excess of $10 billion. Tencent presently owns 37% of Huya and 38% of DouYu. China’s game streaming market has $3.4 billion a year in annual revenues. 

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world’s first benchmark cross sector Chinese Bond Indices. Read ATF now. 

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