Google’s Fitbit deal could avoid EU antitrust probe by agreeing not to use health data for ads

Google announced its plans to acquire Fitbit for $2.1 billion back in November. As of this writing, the deal has yet to go through, courtesy of all the usual regulatory scrutiny that occurs any time one large company buys another. EU regulators are often a key hurdle for these sorts of deals, and this time it may be no different.

Citing “people familiar with the matter,” Reuters notes that Google may be facing down some scrutiny in the form of an EU antitrust investigation if it doesn’t make some concessions. The heart of the concern here is a matter of health privacy. Fitbit — like many other wearable companies — collects a tremendous amount of health information from wearers.

Google, of course, is a company tremendously invested in data and advertising. Critics of the deal have suggested that purchasing Fitbit would provide yet another rich vein of data for Google to mine. As such, the deal could hinge on the promise that Google will never use health data to sell ads.

The stipulation is in keeping with a promise the company made when the acquisition was first announced, with the company’s head of hardware Rick Osterloh promising, “[P]rivacy and security are paramount. When you use our products, you’re trusting Google with your information. We understand this is a big responsibility and we work hard to protect your information, put you in control and give you transparency about your data.”

In a follow-up to this week’s reporting, the company noted that it believes the acquisition would increase competition. While Fitbit has a sizable footprint, Apple, Xiaomi and Huawei currently dominate the category, due in part to Fitbit’s late start in the smartwatch category. Google’s efforts to make inroads through Wear OS have largely come up short, though the company did also purchase a chunk of smartwatch tech from Fossil last January.

A spokesperson also attempted to put to rest potential regulatory fears, stating, “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.”

Regulators are set to decide on the deal by July 20. Google reportedly has until July 13 to present its concessions.

Fitbit gains FDA authorization for its low-cost emergency ventilator

Fitbit has secured an Emergency Use Authorization (EUA) from the U.S. Food and Drug Administration (FDA) for its Fitbit Flow emergency ventilator. The ventilator hardware is low-cost, and doesn’t require very much training or expertise to use, making it a good solution for deployment in scenarios where healthcare systems are overwhelmed by resource strain stemming from the COVID-19 pandemic.

The Fitbit ventilator is based on the MIT E-Vent system, as well as specs provided by the UK government for ventilators to be used by hospitals in that country during the ongoing coronavirus outbreak. I’s an automated resuscitator-style ventilator, which essentially replicates the function of the types of manual resuscitation bags used by paramedics and EMTs in the field.

This is a style of emergency ventilator that has become popular in light of the pandemic, in part because they can be built using relatively affordable and readily available components vs. the standard style of medical ventilators healthcare facilities typically use. Fitbit says it believes that its design is particularly effective, with the right combination of sensors, automated alarms and other patient monitoring features that supplement the automation of resuscitation bag pump.

While a lot of the attention around the need for emergency use ventilators has subsided in recent weeks, the need still exists, and will likely resurge along with new waves of COVID-19 transmission in the coming months. Projects like the Fitbit Flow aim to provide options should they be required, and the FDA EUA means that the company can now work with its existing manufacturing partners to build these in large volumes to address need.

Ventilators like the Flow aren’t designed to replace existing, traditional medical ventilators – instead, they’re intended as stopgaps, to be used only when that hardware isn’t available in quantities needed to treat patients.

Fitbit launches a COVID-19 early detection study, and you can join from the Fitbit app

Fitbit’s activity-tracking wearable devices are already being used by a number of academic institutions to determine if they might be able to contribute to the early detection of COVID-19 and the flu, and now Fitbit itself is launching its own dedicated Fitbit COVID-19 Study, which users can sign up for from within their Fitbit mobile app.

The study will help the company figure out if it can successfully develop an algorithm to accurately detect a COVID-19 infection before the onset of systems. In order to gather the data needed to see if they can do this, Fitbit is asking users in either the U.S. or Canada who have either had or currently have a confirmed case of COVID-19, or flu-like symptoms that might be an indicator of an undiagnosed case, to answer some questions in order to contribute to its research.

The answer to these questions from participants will be paired with data gathered via their Fitbit to help identify any patterns that could potentially provide an early warning about someone falling ill. Pre-symptomatic detection could have a number of benefits, mostly obviously in ensuring that an individual is then able to self-isolate more quickly and prevent them from infecting others.

Early detection could also have advantages in terms of treatment, allowing health practitioners to intervene earlier and potentially prevent the worst of the symptoms of the infection. Depending on what treatments ultimately emerge, early detection could have a big impact on their efficacy.

Fitbit is asking those who would take part in the study to answer questions about whether or not they have or have expressed COVID-19 or flu, its symptoms, as well as other demographic and medical history info. Participation in the study is voluntary, in case you’re not comfortable sharing that info, and once in, participants can decided to withdraw whenever they want.

COVID-19 early detection could be a big help in any safe, actually practical return-to-work strategy for reopening the economy. It could also serve as a means of expanding diagnosis in combination with testing, depending on how accurate it’s found to be across these studies, and with what devices. A confirmed COVID-19 diagnosis doesn’t actually have to mean a test result; it could be a physician’s assessment based on a number of factors, including biometric data nd symptom expression. Depending on what a comprehensive mitigation strategy ends up looking like, that could play a much bigger role in assessing the scale and spread of COVID-19 in future, especially as we learn more about it.

Google gobbling Fitbit is a major privacy risk, warns EU data protection advisor

The European Data Protection Board (EDPB) has intervened to raise concerns about Google’s plan to scoop up the health and activity data of millions of Fitbit users — at a time when the company is under intense scrutiny over how extensively it tracks people online and for antitrust concerns.

Google confirmed its plan to acquire Fitbit last November, saying it would pay $7.35 per share for the wearable maker in an all-cash deal that valued Fitbit, and therefore the activity, health, sleep and location data it can hold on its more than 28M active users, at ~$2.1 billion.

Regulators are in the process of considering whether to allow the tech giant to gobble up all this data.

Google, meanwhile, is in the process of dialling up its designs on the health space.

In a statement issued after a plenary meeting this week the body that advises the European Commission on the application of EU data protection law highlights the privacy implications of the planned merger, writing: “There are concerns that the possible further combination and accumulation of sensitive personal data regarding people in Europe by a major tech company could entail a high level of risk to the fundamental rights to privacy and to the protection of personal data.”

Just this month the Irish Data Protection Commission (DPC) opened a formal investigation into Google’s processing of people’s location data — finally acting on GDPR complaints filed by consumer rights groups as early as November 2018  which argue the tech giant uses deceptive tactics to manipulate users in order to keep tracking them for ad-targeting purposes.

We’ve reached out to the Irish DPC — which is the lead privacy regulator for Google in the EU — to ask if it shares the EDPB’s concerns.

The latter’s statement goes on to reiterate the importance for EU regulators to asses what it describes as the “longer-term implications for the protection of economic, data protection and consumer rights whenever a significant merger is proposed”.

It also says it intends to remain “vigilant in this and similar cases in the future”.

The EDPB includes a reminder that Google and Fitbit have obligations under Europe’s General Data Protection Regulation to conduct a “full assessment of the data protection requirements and privacy implications of the merger” — and do so in a transparent way, under the regulation’s principle of accountability.

“The EDPB urges the parties to mitigate the possible risks of the merger to the rights to privacy and data protection before notifying the merger to the European Commission,” it also writes.

We reached out to Google for comment but at the time of writing it had not provided a response nor responded to a question asking what commitments it will be making to Fitbit users regarding the privacy of their data.

Fitbit has previously claimed that users’ “health and wellness data will not be used for Google ads”.

However big tech has a history of subsequently steamrollering founder claims that ‘nothing will change’. (See, for e.g.: Facebook’s WhatsApp U-turn on data-linking.)

“The EDPB will consider the implications that this merger may have for the protection of personal data in the European Economic Area and stands ready to contribute its advice on the proposed merger to the Commission if so requested,” the advisory body adds.

We’ve also reached out to the European Commission’s competition unit for a response to the EDPB’s statement.

Where are wearables going in 2020?

Apple has throttled the competition in another category.

During the company’s recent earnings call, CEO Tim Cook noted the company’s wearable division now rivals the size of a Fortune 500 company. He failed to give more specifics, but the point is striking: between Apple Watch and AirPods, Cupertino has another juggernaut on its hands.

Apple’s wearable fortunes come from two distinct sub-categories: more mature wrist-worn devices that include smartwatches and wearable trackers (and all of the overlap therein) and fully wireless earbuds or “hearables,” as they’re sometimes known.

I’m pulling IDC numbers from December for the latest, but these seem to mostly comport with what I’ve been seeing from firms over the past year. Apple’s on top with a little more than a third of total global market share — nearly 200 percent growth over the prior year. That’s thanks in no small part to the addition of AirPods Pro to the mix. Though getting back to Apple’s recent earnings, Cook notes that three-quarters of Apple Watch purchases in the previous quarter were by people who were buying the device for the first time. So there’s plenty of growth there, as well.

Xiaomi is at a distant number two with around 15 percent of the market. That’s still a commanding presence, as the company has expanded into new markets (mostly in Europe) with devices that undercut the competition. Samsung found success at around 10 percent of the global market with its diversification (watches, earbuds and fitness trackers), while Huawei maintained a strong presence in China with 80 percent of its total shipments in its home country as it struggles with other issues abroad.

Listen to top VCs discuss the next generation of automation startups at TC Sessions: Robotics+AI

Robotics, AI and automation have long been one of the hottest categories for tech investments. After years and decades of talk, however, those big payouts are starting to pay off. Robotics are beginning to dominate nearly every aspect of work, from warehouse fulfillment to agriculture to retail and construction.

Our annual TC Sessions: Robotics+AI event on March 3 affords us the ability to bring together some of the top investors in the category to discuss the hottest startups, best bets and opine on where the industry is going. And this year’s VC panel is arguably our strongest yet:

  • Eric Migicovsky is a general partner a Y Combinator. Prior to joining the firm, he co-founded Pebble. The smartwatch pioneer was itself a YC-backed venture, along with raising three of Kickstarter’s all-time top crowdfunding campaigns. Migicovsky joined YC following Fitbit’s acquisition of the startup in 2016.
  • DCVC partner Kelly Chen focuses primarily on the AI, robotics, manufacturing and work-related sectors. Her work is generally focused on the world of hardware, along with the transformations of populations and labor.
  • Dror Berman co-founded Innovations Ventures in 2010 with former Google CEO Eric Schmidt. A key driver in the firm’s investments in Uber, SoFi and Formlabs, Berman also focuses on robotics, including companies like Blue River Technology and Common Sense Robotics.

TC Sessions: Robotics+AI returns to Berkeley on March 3. Make sure to grab your early-bird tickets today for $275 before prices go up by $100. Startups, book a demo table right here and get in front of 1,000+ of Robotics/AI’s best and brightest — each table comes with four attendee tickets.

Wearable band shipments grew globally, driven by Xiaomi

Apple may dominate the wearable conversation here in the States, but things look a fair bit different on the other side of the world. In Asia, Xiaomi is the giant in the room. According to new numbers form Canalys, the Chinese manufacturer was the key driver in global growth.

Wearable band shipments grew 65%, year over year for Q3. Xiaomi continues to top the list, with an even more impressive 74% versus this time last year. That puts gives the company 27% of the total global wearable band market — its highest number since 2015.

Low prices have been the key to the company’s success, which have helped grow shipments in China by 60% overall. The company’s strategy has also rubbed off on competitors like Samsung and Fitbit (soon to be counted among Google’s numbers), which have sought to offer low cost devices in order to appeal to those users, particularly in Asia.

Huawei saw substantial growth for the quarter, as well, at 243% year over year, courtesy of strong sales in its native China. Those numbers helped the company hold onto third place globally, just ahead of Fitbit.

Even Apple is offering up lower cost devices by keeping older model Apple Watches around, hitting the $200 price point The company’s new, premium devices continue to dominate, however. The Series 5 comprise upwards of 60% of the company’s global shipments for the quarter.

No one knows how effective digital therapies are, but a new tool from Elektra Labs aims to change that

Depending on which study you believe, the wearable and digital health market could be worth anywhere from $30 billion to nearly $90 billion in the next six years.

If the numbers around the size of the market are a moving target, just think about how to gauge the validity and efficacy of the products that are behind all of those billions of dollars in spending.

Andy Coravos, the co-founder of Elektra Labs, certainly has.

Coravos, whose parents were a dentist and a nurse practitioner, has been thinking about healthcare for a long time. After a stint in private equity and consulting, she took a coding bootcamp and returned to the world she was raised in by taking an internship with the digital therapeutics company, Akili Interactive.

Coravos always thought she wanted to be in healthcare, but there was one thing holding her back, she says. “I’m really bad with blood.”

That’s why digital therapeutics made sense. The stint at Akili led to a position at the U.S. Food and Drug Administration as an entrepreneur in residence, which led to the creation of Elektra Labs roughly two years ago.

Now the company is launching Atlas, which aims to catalog the biometric monitoring technologies that are flooding the consumer health market.

These monitoring technologies, and the applications layered on top of them, have profound implications for consumer health, but there’s been no single place to gauge how effective they are, or whether the suggestions they’re making about how their tools can be used are even valid. Atlas and Elektra are out to change that. 

The FDA has been accelerating its clearances for software-driven products like the atrial fibrillation detection algorithm on the Apple Watch and the ActiGraph activity monitors. And big pharma companies like Roche, Pfizer and Novartis have been investing in these technologies to collect digital biomarker data and improve clinical trials.

Connected technologies could provide better care, but the technologies aren’t without risks. Specifically the accuracy of data and the potential for bias inherent in algorithms which were created using flawed datasets mean that there’s a lot of oversight that still needs to be done, and consumers and pharmaceutical companies need to have a source of easily accessible data about the industry.

”The increase in FDA clearances for digital health products coupled with heavy investment in technology has led to accelerated adoption of connected tools in both clinical trials and routine care. However, this adoption has not come without controversy,” said Coravos, co-founder and CEO of Elektra Labs, in a statement. “During my time as an Entrepreneur in Residence in the FDA’s Digital Health Unit, it became clear to me that like pharmacies which review, prepare, and dispense drug components, our healthcare system needs infrastructure to review, prepare, and dispense connected technologies components.

The analogy to a pharmacy isn’t an exact fit, because Elektra Labs currently doesn’t prepare or dispense any of the treatments that it reviews. But Atlas is clearly the first pillar that the digital therapeutics industry needs as it looks to supplant pharmaceuticals as treatments for some of the largest and most expensive chronic conditions (like diabetes).

Coravos and here team interviewed more than 300 professionals as they built the Atlas toolkit for pharmaceutical companies and other healthcare stakeholders seeking a one-stop-shop for all of their digital healthcare data needs. Like a drug label, or nutrition label, Atlas publishes labels that highlight issues around the usability, validation, utility, security and data governance of a product.

In an article in Quartz earlier this year, Coravos made her pitch for Elektra Labs and the types of things it would monitor for the nascent digital therapeutics industry. It includes the ability to handle adverse events involving digital therapies by providing a single source where problems could be reported; a basic description for consumers of how the products work; an assessment of who should actually receive digital therapies, based on the assessment of how well certain digital products perform with certain users; a description of a digital therapy’s provenance and how it was developed; a database of the potential risks associated with the product; and a record of the product’s security and privacy features.

As the projections on market size show, the problem isn’t going to get any smaller. As Google’s recent acquisition bid for FitBit and the company’s reported partnership with Ascension on “Project Nightingale” to collect and digitize more patient data shows, the intersection of technology and healthcare is a huge opportunity for technology companies.

“Google is investing more. Apple is investing more… More and more of these devices are getting FDA cleared and they’re becoming not just wellness tools but healthcare tools,” says Coravos of the explosion of digital devices pitching potential health and wellness benefits.

Elektra Labs is already working with undisclosed pharmaceutical companies to map out the digital therapeutic environment and identify companies that might be appropriate partners for clinical trials or acquisition targets in the digital market.

“The FDA is thinking about these digital technologies, but there were a lot of gaps,” says Coravos. And those gaps are what Elektra Labs is designed to fill. 

At its core, the company is developing a catalog of the digital biomarkers that modern sensing technologies can track and how effective different products are at providing those measurements. The company is also on the lookout for peer-reviewed published research or any clinical trial data about how effective various digital products are.

Backing Coravos and her vision for the digital pharmacy of the future are venture capital investors including Maverick Ventures, Arkitekt Ventures, Boost VC, Founder Collective, Lux Capital, SV Angel, and Village Global.

Alongside several angel investors, including the founders and chief executives from companies including: PillPack, Flatiron Health, National Vision, Shippo, Revel and Verge Genomics, the venture investors pitched in for a total of $2.9 million in seed funding for Coravos’ latest venture.

“Timing seems right for what Elektra is building,” wrote Brandon Reeves, an investor at Lux Capital, which was . one of the first institutional investors in the company. “We have seen the zeitgeist around privacy data in applications on mobile phones and now starting to have the convo in the public domain about our most sensitive data (health).” 

If the validation of efficacy is one key tenet of the Atlas platform, then security is the other big emphasis of the company’s digital therapeutic assessment.  Indeed, Coravos believes that the two go hand-in-hand. As privacy issues proliferate across the internet, Coravos believes that the same troubles are exponentially compounded by internet-connected devices that are monitoring the most sensitive information that a person has — their own health records.

In an article for Wired, Koravos wrote:

Our healthcare system has strong protections for patients’ biospecimens, like blood or genomic data, but what about our digital specimens? Due to an increase in biometric surveillance from digital tools—which can recognize our face, gait, speech, and behavioral patterns—data rights and governance become critical. Terms of service that gain user consent one time, upon sign-up, are no longer sufficient. We need better social contracts that have informed consent baked into the products themselves and can be adjusted as user preferences change over time.

We need to ensure that the industry has strong ethical underpinning as it brings these monitoring and surveillance tools into the mainstream. Inspired by the Hippocratic Oath—a symbolic promise to provide care in the best interest of patients—a number of security researchers have drafted a new version for Connected Medical Devices.

With more effective regulations, increased commercial activity, and strong governance, software-driven medical products are poised to change healthcare delivery. At this rate, apps and algorithms have the opportunity to augment doctors and complement—or even replace—drugs sooner than we think.

Can a combined Google/Fitbit take on the Apple Watch?

In January 2014, Google announced plans to acquire Nest for $3.2 billion; the acquisition was completed the following day, but since then, Nest’s integration has been a controlled burn. Initially, the company existed as a subsidiary of the newly-formed Alphabet Inc., but in early 2018, Google tightened its grip and integrated it directly into its hardware division.

Over the next year and a half, Nest became the face and name of Google’s smart home offering, a division that’s grown quickly as Google Home/Google Nest has become one of the top two players in the U.S. smart home category, rivaled only by Amazon’s Alexa/Echo offerings.

All the while, wearables have been an also-ran: Google has clearly had an interest in the category, launching Android Wear in 2014. The company partnered with some of consumer hardware’s biggest names, including Motorola, Asus, Sony, Huawei and LG, but to little fanfare. A year ahead the release of Android Wear (now Wear OS), Apple brought its own smartwatch to market, effectively leaving the competition in the dust.

The Apple Watch would soon eclipse the rest of the wearable industry; numbers from Canalys in August 2019 show Apple at 37.9 percent of the total North American wearable band market. Fossil, the only Wear OS partner to crack the top five, is in a distant fifth, with 4.1%.

Samsung and Garmin have found success with their own offerings, but both are far behind Fitbit at second place. Founded in 2007, Fitbit would eventually become synonymous with fitness trackers. A humble startup when it showcased its first product (an eponymous 3D pedometer) on stage at our TC50 event in 2008, Fitbit’s rise has been an unqualified success.

Fitbit predicted and eventually came to define the wearable zeitgeist, finding itself at the forefront of the next big wave in consumer electronics after the smartphone. As the mobile category has plateaued, wearables continue to grow at an impressive pace. Let’s take a moment to appreciate what has been an impressive run.

The last few years, however, have been far rockier as Fitbit stumbled and sputtered. By CEO James Park’s own admission, the company failed to embrace smartwatches quickly and fully enough, and as it has so many times in the past, Apple entered and dominated the space, leaving Fitbit reeling with an uncertain future.

Google’s Fitbit purchase could reshape its healthcare ambitions

Google has reached into parent company Alphabet’s $121 billion cash reserves to spend $2.1 billion on Fitbit, a move into the key consumer health market that places them in more direct competition with rival Apple.

For more than a year, Ftibit and Google have partnered on healthcare applications; last April, Fitbit announced that it would work with Google’s application programming interface to connect data with electronic medical records via Google’s Cloud Healthcare API. That move followed Fitbit’s February 2018 acquisition of Twine Health, which gave the wearables company a consumer health platform which complied with existing federal regulations.

“Working with Google gives us an opportunity to transform how we scale our business, allowing us to reach more people around the world faster, while also enhancing the experience we offer to our users and the healthcare system,” said Fitbit CEO and co-founder James Park at the time of the 2018 Google partnership.

Companies throughout the healthcare industry are pushing to get closer to patients, and wearables have opened a new window into their health. Additionally, the technology can potentially encourage patients to pursue preventive healthcare measures, rather than seeking care after they’re ill.

“All of us… we’re pursuing the same thing,” said a prominent healthcare executive at a multinational medical device manufacturer. “We see a healthcare system that’s highly inefficient with a lot of waste that is very much episode-related, where we all know health is dynamic and continuous.” Gaining “better insight into health and disease drivers and interventions at the right place and the right time is the holy grail.”

Privacy concerns abound

The biggest challenge for Alphabet and Google with this acquisition is privacy; the company has already faced massive criticism for its push into healthcare in the U.K. regarding concerns about how it would handle sensitive health information. The technology industry’s habit of releasing minimum viable products doesn’t work in an industry where complications can literally become a matter of life and death.

Sensing inevitable concern around Google’s upcoming access to a bevy of health data, Rick Osterloh, Google’s SVP for devices and services, offered that the company will not use user information for advertising. “We will never sell personal information to anyone,” he wrote. “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.”

Competition with Apple

Those privacy concerns stand in direct contrast to the obvious competitor driving this acquisition forward — Apple. The Cupertino-based king of consumer hardware has set itself apart from other consumer tech companies through its professed emphasis on privacy, a position that Apple will likely leverage further as it continues to make deeper forays into health.