Google’s $2.1 billion Fitbit deal hits roadblock as EU opens probe

By Foo Yun Chee

BRUSSELS (Reuters) – Alphabet unit Google’s bid to take on Apple and Samsung in the wearable technology market by buying Fitbit hit a hurdle on Tuesday as EU antitrust regulators launched an investigation into the $2.1 billion deal.

The move by the European Commission on Tuesday came despite Google’s pledge last month not to use the fitness tracker’s data for advertising purposes in a bid to address competition concerns.

The EU antitrust enforcer said the data pledge was insufficient to allay its worries.

“The proposed transaction would further entrench Google’s market position in the online advertising markets by increasing the already vast amount of data that Google could use for personalization of the ads it serves and displays,” the Commission said.

It singled out online search and display advertising services and ad tech services, where analytics and digital tools are used in digital advertising, as two areas that would be affected by the deal.

It said data collected via wrist-worn wearable devices appeared to be an important advantage in online advertising, and the deal would give Google an edge in personalizing search engine ads and making it difficult for rivals to compete.

Ultimately this would result in higher prices for advertisers and publishers.

The investigation will also focus on digital healthcare and whether Google would make it difficult for rival wearables to function with its Android smartphone operating system.

The Commission will decide by Dec. 9 whether to clear or block the deal.

Google said the combination of its and Fitbit’s hardware would increase competition in the sector where players include Apple, Samsung, Xiaomi, Huawei and others.

“This deal is about devices, not data. We’ve been clear from the beginning that we will not use Fitbit health and wellness data for Google ads,” Rick Osterloh, senior vice president for devices and services, said in a statement.

“As we do with all our products, we will give Fitbit users the choice to review, move or delete their data.”

The deal has drawn criticism from healthcare providers, wearables rivals and privacy advocates.

Fitbit has a 3% share of the global wearables market as of the first quarter of 2020, far behind Apple’s 29.3% share, and also trailing Xiaomi, Samsung and Huawei, data from market research firm International Data Corp showed.

(Reporting by Foo Yun Chee; Editing by Jan Harvey)

Some Samsung, Hyundai workers self-quarantine as Korea Inc braces for virus impact

Some Samsung, Hyundai workers self-quarantine as Korea Inc braces for virus impact
By Hyunjoo Jin and Joyce Lee

SEOUL (Reuters) – Some South Korean workers at Samsung Electronics <005930.KS> and Hyundai Motor <005380.KS> are staying home as a precautionary measure as corporate Korea scrambles to prevent the coronavirus outbreak from causing widespread disruption in its home market.

The country’s third-largest conglomerate SK Group, which controls memory chip maker SK Hynix <000660.KS> and mobile carrier SK Telecom, advised its employees to work remotely starting from Tuesday due to the coronavirus outbreak.

About 1,500 workers of Samsung Electronics’ phone complex in the southeastern city of Gumi have self-quarantined after one of its workers was infected with the disease, a person familiar with the matter said. They include 900 workers who commute to Gumi from neighboring Daegu city, the person said.

The southeastern city of Daegu – the epicenter of the virus outbreak in South Korea- and nearby cities are an industrial hub in South Korea, Asia’s fourth-biggest economy, and home to factories of Samsung Electronics, Hyundai Motor and a number of others.

South Korea on Monday reported 161 new cases of the coronavirus, bringing the total number of infected patients in the country to 763, a day after the government raised its infectious disease alert to its highest level.

Samsung Electronics shares fell 4.1% and Hyundai Motor ended down 4.3%, tracking the wider market’s <.KS11> 3.9% fall, as the spike in new coronavirus cases intensified fears about the epidemic’s fallout on the economy and businesses.

Samsung said it has restarted production at its phone factory complex in Gumi on Monday, after closing it over the weekend, adding that the floor where the infected employee worked will resume production on Tuesday.

“As of 1 p.m. KT (0400 GMT) Feb. 24, the Gumi Complex has started normal operations and we expect no impact on production,” Samsung said in a statement, without elaborating further.

Samsung’s Gumi factory accounts for a small portion of its total phone production, but it produces premium phones and foldable phones, research firm Counterpoint said.

Six employees at Hyundai Motor’s factories in the southeastern city of Ulsan are also at home, with four of them linked to a church at the center of the virus outbreak, a union spokesman said in a statement.

“We are walking on ice,” one Hyundai factory worker told Reuters.

A factory run by Hyundai supplier Seojin Industrial was closed over the weekend after the death of a virus-infected worker, an official at the supplier said. He said that authorities disinfected the factory, located in the city of Gyeongju, and it is unclear when production will resume.

Seojin declined to comment when contacted by Reuters.

Any disruption would be a fresh blow to Hyundai, which has restarted most of its domestic factories’ production after being hit by suspensions due to parts shortages from China.

Ulsan is home to Hyundai’s biggest car factories, and there are a number of suppliers in the city and surrounding areas, which cater not only to the automaker, but export to the United States, Japan and other markets.

A Hyundai Motor spokesman said there has been no production disruption so far as the automaker has inventory.

With virus fears spreading nationwide, Hyundai set up thermal cameras at all of its operations across the nation, including its headquarters in Seoul, to check temperatures.

(Reporting by Hyunjoo Jin and Joyce Lee; Additional reporting by Heekyong Yang; Editing by Raju Gopalakrishnan and Muralikumar Anantharaman and Kirsten Donovanh)

South Korea to hold election May 9, prosecutors summon ousted Park

South Korea's ousted leader Park Geun-hye greets her supporters as she arrives at her private home in Seoul, South Korea, March 12, 2017. REUTERS/Kim Kyung-Hoon

By Christine Kim and Ju-min Park

SEOUL (Reuters) – South Korea said on Wednesday it will hold an election on May 9 to choose a successor for former President Park Geun-hye, who was removed from office in a historic court ruling last week over a widening corruption scandal.

Prosecutors said on Wednesday Park – the first democratically elected president to be removed from office in South Korea – would be summoned for questioning on Tuesday into the influence-peddling scandal.

The Constitutional Court dismissed Park from office on Friday when it upheld a parliamentary impeachment vote in December.

Park has denied any wrongdoing.

The Samsung Group [SAGR.UL], South Korea’s largest conglomerate, is already embroiled in the scandal and the Yonhap news agency said prosecutors had started investigating two other conglomerates – the Lotte Group and SK Group.

Samsung denies any wrongdoing. Spokesman for both the SK Group and Lotte said they would cooperate with the investigation.

The turmoil comes at a time of rising tension with North Korea over its nuclear and missile programs, and with China over the deployment of a U.S. anti-missile system in South Korea that China sees as a threat to its security.

U.S. Secretary of State Rex Tillerson will visit South Korea, as well as Japan and China, this week.

Prime Minister Hwang Kyo-ahn, who has been acting president since the impeachment vote, said he would not run in the election.

Minister of the Interior Hong Yun-sik promised the vote would be the most clean and transparent ever.

“This election is unprecedented in our history,” Hong told a briefing, referring to the short campaign period.

Hwang had emerged in opinion polls as a top conservative candidate even though he had not declared an intention to run.

The scandal has undermined support for the ruling conservatives, and Hwang’s decision would appear to bolster the chances of a prominent liberal, Moon Jae-in, who is leading in opinion polls.


Park was summoned to appear for questioning at 9.30 a.m. (0030 GMT) next Tuesday, the prosecutors’ office said.

Her lawyers said in a statement they would cooperate.

“The lawyers will cooperate with the investigation to find substantive truth swiftly by actively helping with various procedures,” they said.

Park had declined to be questioned by prosecutors or testify at the Constitutional Court when she was in office.

After she left the presidential Blue House on Sunday, she issued a statement hinting of defiance, saying: “It will take time, but I believe the truth will be revealed.”

Prosecutors have not said how long they think their investigation would last.

A special prosecution team had accused Park of colluding with a friend, Choi Soon-sil, to pressure big businesses into contributing to foundations set up to support her policies and allowing Choi to influence state affairs.

Choi also denied wrongdoing.

Jay Y. Lee, the head of Samsung Group, is on trial on bribery, embezzlement and other charges in connection with the scandal. Lee denies all charges.

The prospect of an opposition election victory has raised questions about the future in South Korea of the U.S.-made Terminal High Altitude Area Defense (THAAD) anti-missile system, which China opposes because it says its radar can penetrate its territory.

Tillerson will meet Hwang and Foreign Minister Yun Byung-se in Seoul on Friday. He is not scheduled to see opposition figures, a U.S. State Department official said, raising questions about the durability of any agreements.

The aircraft carrier the USS Carl Vinson is in South Korean waters this week for exercises with South Korean forces.

North Korea said the exercises were part of a “reckless scheme” to attack it and it warned the United States of “merciless” strikes if the carrier infringed on its sovereignty or dignity.

(Reporting by Ju-min Park and Christine Kim; Additional reporting by Se Young Lee, Hyunjoo Jin; Writing by Robert Birsel; Editing by Bill Tarrant)