Google share price rally could stall after Fitbit deal faces EU probe

Alphabet (Google) shares have skyrocketed since the initial Covid-19 market crash, but its stock stuttered on Thursday and could continue to do so after its Fitbit deal draws scrutiny from EU antitrust authorities.

Since hitting a year-low of $1054.13 on 23 March due to the coronavirus outbreak, Google has seen its share price rebound aggressively, climbing 43% since the downturn and up more than 10% year-to-date.

However, that rally risks stalling as a consequence of the EU antitrust investigation into its deal with the wearable tech company.

Google is trading at $1523 per share at the time of publication.

EU antitrust probe could scupper Google’s $2.1 billion Fitbit deal

Google’s $2.1 billion bid for the fitness tracker maker is going to face a full-scale EU antitrust probe next week, according to a recent report by MLex.

In an attempt to quell EU antitrust concerns, Google said that it would not use Fitbit’s health data to help it improve its AdSense software which is used to target consumers online with relevant advertising. However, the promise appears insufficient for EU regulators.

The deal, which was announced back in November last year, will allow Google to compete with tech giants like Apple and Samsung within the wearable tech market, which is worth around $52 billion (£39.8 billion) in 2020.

‘The wearables space is crowded, and we believe the combination of Google and Fitbit’s hardware efforts will increase competition in the sector, benefiting consumers and making the next generation of devices better and more affordable,’ a Google spokeswoman said.

The EU Commission will launch its full-scale investigation into the deal after it has completed its preliminary review on 4 August.

Google plans to keep staff working from home until next summer

The vast majority of Google’s 200,000 staff around the globe have been told to continue working remotely until July 2021, with coronavirus cases resurfacing in North America and Europe.

‘To give employees the ability to plan ahead, we are extending our global voluntary work from home option through June 30, 2021, for roles that don't need to be in the office,’ Google CEO Sundar Pichai wrote in an email to employees.

‘I hope this will offer the flexibility you need to balance work with taking care of yourselves and your loved ones over the next 12 months,’ he added.

Twitter and Square CEO Jack Dorsey reiterated similar sentiments to his employees earlier this month, telling workers that they are free to continue working remotely if they wish.

'We've been very thoughtful in how we've approached this from the time we were one of the first companies to move to a work-from-home model,' a Twitter spokesperson said at the time.

'We'll continue to be, and we'll continue to put the safety of our people and communities first.'

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