European Union raises anti-competition red flag on Amazon’s iRobot acquisition

Amazon announced that it was looking to acquire iRobot last year, in a deal valued at $1.7 billion USD (roughly $2.2 billion CAD at the time).

The deal has been waiting for a thumbs-up from European Union regulators. The initial deadline for the deal was December 13th, 2023, but it was recently extended to February 14th, 2024. 

Since then, roughly 24 human rights groups wrote a letter to the FTC, asking it to block the deal because it would harm the consumer technology market and violate user privacy.

Now, as shared in a press release by the European Union, the commission has “informed Amazon of its preliminary view that its proposed acquisition of iRobot may restrict competition in the market for robot vacuum cleaners (‘RVCs’).”

Back in July this year, the European Union opened an in-depth investigation to assess whether the acquisition will restrict competition in robo-vacuum manufacturing industry and allow Amazon to strengthen its position in the “market for online marketplace services to third-party sellers (and related advertising services) and/or other data-related markets.”

If the acquisition does go through, Amazon might have the ability and incentive to “foreclose iRobot’s rivals by engaging in several foreclosing strategies.” These would prevent the company’s rivals from selling their robo-vacuums on Amazon’s online marketplace by limiting their visibility or entirely delisting them.

The European Union states that the above mentioned reasons, alongside Amazon having an economic incentive to foreclose iRobot’s rivals, which would all lead to higher prices, lower quality and less innovation for consumers of the robo-vacuum market.

The commission reportedly collaborated with other competition authorities for the initial investigation and the in-depth investigation and will continue cooperation during the remained of the in-depth investigation.

On the other hand, Amazon spokesperson Alexandra Miller said that the company is working through the process with the European Union and is focused on addressing its questions and any identified concerns. “iRobot, which faces intense competition from other vacuum cleaner suppliers, offers practical and inventive products. We believe Amazon can offer a company like iRobot the resources to accelerate innovation and invest in critical features while lowering prices for consumers.”

Read the complete European Union report here.

Source: European Union Via: The Verge