Big antitrust scrutiny on Big Tech is hopping borders, as U.S. and European regulators looking into the matter will be joined by Japan.
On Monday, Japan’s Fair Trade Commission indicated it will take a look at any market abuses by “GAFA,” which stands for Google, Apple, Facebook and Amazon. In the U.S., investors typically refer to the group as “FAANG,” with the inclusion of Netflix. Either way, the acronyms are used interchangeably to broadly refer to the tech sector’s largest companies.
Like the U.S. and Europe, FTC chairman Kazuyuki Furuya also seemed interested in more than just internal policies and platform tactics, but also high-priced mergers and acquisitions. In particular, the official cited Google’s acquisition of Fitbit — a $2.1 billion deal that, after being unveiled nearly a year ago, was still winding its way through an increasingly fraught approvals process until recently.
In the U.S., concerns arose that Google would use Fitbit health data to target ads or use the acquired tech to hobble competition. Those worries took flight in the E.U., which has stringent consumer privacy protections in place.
But the search giant has made concessions, offering official — and likely more legally binding — assurances to appease the regulators. In addition to formally stating, as a matter of policy, that it would not apply user data for ad targeting, the company said in a statement that “we’re also formalizing our long-standing commitment to supporting other wearable manufacturers on Android and to continue to allow Fitbit users to connect to third party services via APIs (application programming interfaces) if they want to.”
Now Tokyo is poised to take a closer look.
“If the size of any merger or business tie-up is big, we can launch an anti-monopoly investigation into the buyer’s process of acquiring a start-up (like Fitbit),” Furuya said to the media. “We’re closely watching developments including in Europe.”
The attention in Japan could matter, considering the trajectory of the worldwide wearables market.
According to the “Smart Watch Global Market Report 2020: COVID-19 Growth and Change,” a report published recently by The Business Research Company, Asia Pacific will be the fastest-growing region for smartwatches from 2020 to 2030. In 2019, the largest region was North America.
According to IDC’s latest “Worldwide Quarterly Wearable Device Tracker” report, the wearables market is on track to reach nearly 400 million units this year, despite the coronavirus pandemic’s effects on the global economy. The firm forecasts a five-year compound annual growth rate for shipment volumes to hit 12.4 percent and total 637.1 million units in 2024.
Wearables are not Furuyama’s sole focus, of course. He intends to keep a close eye on numerous digital businesses, particularly mobile devices — a sector that Prime Minister Yoshihide Suga has criticized for being too expensive.
“We’ll work closely with our U.S. and European counterparts, and respond to any moves that hamper competition,” the FTC chair explained.