The Australian Competition and Consumer Commission said on Tuesday it will continue its investigation into Google’s proposed acquisition of Fitbit and has set a new decision date of 25 March 2021.

“The ACCC continues to have concerns that Google’s acquisition of Fitbit may result in Fitbit’s rivals, other than Apple, being squeezed out of the wearables market, as they are reliant on Google’s Android system and other Google services to make their devices work effectively,” ACCC Chair Rod Sims said.

Sims said the proposed acquisition also further consolidates Google’s leading position in relation to the collection of user data, which supports its significant market power in online advertising and is likely to have applications in health markets.

“We are also continuing to investigate the acquisition’s potential impact on wearable operating systems. The acquisition may result in Google becoming the default provider of wearable operating systems for non-Apple devices and give it the ability to be a gatekeeper for wearables data, similar to the position it holds for smartphones which licence the Android operating system,” Sims said.

“Wearable devices such as smart-watches are becoming more important in Australians’ online lives, and the user data these devices collect is likely to become increasingly valuable. The competition impacts of Google acquiring Fitbit to expand into these important markets needs to be very carefully considered.”

In its statement the Commission said Google sought to address its competition concerns by offering a court enforceable undertaking that it would behave in certain ways towards rival wearable manufacturers, not use health data for advertising and, in some circumstances, allow competing businesses access to health and fitness data.

“While we are aware that the European Commission recently accepted a similar undertaking from Google, we are not satisfied that a long term behavioural undertaking of this type in such a complex and dynamic industry could be effectively monitored and enforced in Australia,” Sims said.

“We recognise we are a smaller jurisdiction and that a relatively small percentage of Fitbit and Google’s business takes place here, however the ACCC must reach its own view in relation to the proposed acquisition given the importance of both companies to commerce in Australia.”

The proposed acquisition has received conditional clearance in Europe, but several other competition authorities, including the US Department of Justice, are yet to make a decision. Both companies are based in the US and Fitbit’s market share is higher in the US than in most other countries.

The ACCC says it will continue to work closely with overseas agencies on “these important competition issues”, and has extended its decision date for reviewing the transaction through to 25 March 2021 in order to continue its investigation and consider its legal options.