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Alphabet Inc’s (NASDAQ:GOOGL) Google recently revealed its plans to acquire Fitbit, a smartwatch giant at a deal worth $2.1 billion. The move, if implemented, will make Google a direct competitor of Apple in the manufacture and distribution of fitness tracking devices. Google has been making attempts to venture into virtual wellness markets.

The shares of both companies went up immediately after the announcement was made at the closure of the week. Specifically, Fitbit stock went up 16% while Google’s share was up with 0.8%. The terms of the agreement stipulate that Google will pay $7.35 in cash for each share for the deal. The deal is anticipated to close in early 2020.

Google intends to acquire Fitbit to enable the tech giant to strengthen its smartwatch software, Wear OS. The company also plans to accelerate innovation and creativity in the field of wearables and manufacture products that will touch people globally. Currently, Google has operating systems, but it lacks its wearable products; hence, Fitbit comes on board to fill the gap. In January 2019, Google purchased Fossil’s smartwatch for $40 million, and it also owns Nest, a smart home device manufacturer.

The anticipated Data Privacy concerns

Though the two companies are determined to work closely together to enhance the platforms of both smartwatch and fitness tracker systems, the privacy of data for users of Fitbit could be in jeopardy. Interested parties have raised concerns about the safety of personal data of users since Google is under investigation on several antitrust scandals. However, Google promised not to misuse health and wellness information from Fitbit for ads.

In the recent past, regulators across the globe have raised concerns about the magnitude and power of Google. Some have suggested the company to be split into smaller companies to reduce dominance on the global market.

Google’s recent reactions indicate that the company is attempting to keep pace with health tech industry leaders, including Apple and Amazon. For instance, Amazon develops virtual health care products for its workforce. Apple makes Apple Watch enable people to track their heartbeats, burnouts, and other body changes.

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