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Fitbit says time frame for Google deal close ‘may extend beyond’ 2020

Fitbit Inc. disclosed in its second-quarter earnings report Wednesday that it while it still expects its merger with Alphabet Inc.’s Google to close before the year is up, it may not get all of its regulatory approvals for that deal before the end of 2020. The company’s report comes a day after the European Commission said it would open an in-depth investigation into the deal over competitive concerns over Google’s ability to use data collected from Fitbit wearables to make ad-targeting decisions. Google previously said it would silo some data from wearables and not use that for advertising purposes, but the E.C. said that it “considers that the data silo commitment proposed by Google is insufficient to clearly dismiss the serious doubts identified at this stage as to the effects of the transaction.” It has 90 working days, or until Dec. 9, to make a decision. “While we still expect Fitbit and Google to secure the necessary regulatory approvals and to close the transaction in 2020, the time frame may extend beyond that,” Fitbit said in its release. “Moreover, the extent to which COVID-19 may impact the timing of receipt of these approvals is uncertain and cannot be predicted.” Fitbit sold 2.5 million devices, down 30% on a year-over-year basis, as it had only one new product introduction in the first half of 2020. Revenue declined to $261.3 million from $313.6 million. Fitbit shares have fallen 6% over the past three months as Alphabet shares have added 9.6% and as the S&P 500 has risen 16%. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.

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