EU regulators say Amazon's acquisition of the IRobot vacuum cleaner could harm competition

  • Post by: Admin
  • Nov 28 2023

European regulators say Amazon's planned acquisition of robot vacuum cleaner maker iRobot could harm competition

The news sparked concerns among investors about the acquisition and sent iRobot Corp. shares plummeting. Bedford, Massachusetts-based company best known for the circular Roomba vacuum cleaner, fell more than 17% on Monday.

European regulators expressed concerns that the acquisition could prevent iRobot's rivals from competing effectively in the Amazon market, which they said is an important platform for selling robot vacuum cleaners in France, Germany, Italy and Spain.

If the deal goes through, Amazon could be incentivized to prevent competitors from selling their products on its marketplace or make it more difficult for them to do so, according to the commission.

It says, among other things, that Amazon could reduce the visibility of a competitor's product on its marketplace or limit access to certain labels, such as "Amazon's Choice," that may attract more buyers. It could also find ways to increase the costs of iRobot's competitors to advertise and sell their products on its platform, the commission said.

The commission has until February 14 to make a final decision on the deal. And Amazon could respond to some of the objections raised.

Alexandra Miller, an Amazon spokeswoman, said the Seattle-based company is cooperating with the commission and focused on answering its questions.

“IRobot, which faces strong competition from other vacuum cleaner suppliers, offers practical and inventive products,” Miller said. “We believe Amazon can provide a company like iRobot with the resources to accelerate innovation and invest in key features while lowering prices for consumers.”

Amazon's acquisition of iRobot was announced last year for $1.7 billion, but the value of the deal has since fallen 15% after the vacuum cleaner maker took on new debt.

Anti-monopoly organizations have raised concerns about the deal, saying it would expand the e-commerce giant's dominance in the smart home market.

But in June, the British antitrust authorities approved Amazon's purchase of iRobot. The takeover is still pending review by the Federal Trade Commission in the USA.

Amazon shares rose less than 1% on Monday.