In brief: SEC filings show there's been a bidding war between Facebook and Google over Fitbit, which the latter eventually won by a small margin. Fitbit employees seem optimistic about the acquisition, but privacy advocates are still questioning the implications. It's possible that Google and Facebook both wanted to tap into the health data of over 28 million users, as most of the innovation they could bring would be on the algorithms side of the equation.
When news broke earlier this month that Google managed to buy Fitbit for $2.1 billion, many users were more than a bit disappointed. Some of them even told CNBC that they're actively looking to get rid of their Fitbit products and move on to alternatives like the Apple Watch as soon as possible.
It also prompted privacy and antitrust advocates to send a letter to the Federal Trade Commission where they argue the deal will give Google even more dominance over internet services and access to a new pool of consumer data.
They propose the deal be blocked, but now an SEC filing shows that Facebook also wanted to acquire the wearable maker. To get an idea of how close it was to succeeding, the social giant's final offer was sitting at $7.30 per share versus Google's $7.35.
In other words, Facebook is the mystery "Party A" that wanted to snap up Fitbit just as much as Google. Also, it looks like the CEOs of the two companies met several times for dinner to discuss the fitness wearable industry and its untapped potential.
Those who owned a Pebble expected Fitbit to come up with something similar after acquiring the intellectual property behind it, but that hasn't happened and seems even less likely to happen under Google. On a more positive note, the remaining Pebble smartwatches in the wild are getting a new lease of life thanks to a few crafty individuals.
In any case, Facebook is no longer interested in bidding for Fitbit. But keep in mind that court filings have shown the social giant leveraged its data policies to gain the upper hand against potential rivals, so Google might just be the better choice.
Unlike Facebook, Google is in a position where it wants to save the Wear OS ecosystem and is generally more trusted by consumers. That said, privacy advocates may be right that this is more about access to the health data of over 28 million users as opposed to trying to compete with Apple and Samsung for the wearables market - only time will tell.
As for how Fitbit employees feel about the acquisition, there is an interesting story on Wired summing up their accounts. Many of them felt like the company lost direction and quite a few decided to stay because of the rumors that Google might buy it and change things for the better.
But seeing as regulators are deeply interested in Google's medical data collection practices, it will have to tread lightly moving forward. The company has promised that it won't sell user data, which could easily be used by insurance companies to redline some wearable owners.