Amazon sweeps dust under the carpet. No acquisition of iRobot after EU antitrust investigation

Brussels – Under pressure from Washington and Brussels, Amazon is taking a step back. “Our in-depth investigation has preliminarily shown that the acquisition of iRobot would have allowed Amazon to foreclose rivals by restricting or degrading access to Amazon Stores,” commented EU Commission Vice-President for Competition, Margrethe Vestager, regarding the Seattle giant’s withdrawal from its acquisition of the Roomba robot vacuum cleaner manufacturer.

The decision came in correspondence with the antitrust investigations by the European Commission and the Federal Trade Commission (the U.S. government agency responsible for consumer protection) into the $1.56 billion deal announced in 2022. In Brussels, the issue of the possible acquisition of iRobot by the U.S.-based e-commerce giant created particular concerns last year: “The Commission is concerned that the proposed transaction would allow Amazon to limit competition in the robot vacuum cleaner market and strengthen its position as a provider of an online marketplace,” had been the warning of the EU antitrust authority at the time of the survey launch. On the one hand, iRobot is one of the leading suppliers of robot vacuum cleaners in the European Economic Area, and on the other hand, Amazon is both a retailer and an online marketplace that is the main sales channel for robot vacuum cleaners, “particularly in France, Germany, Italy, and Spain.”

According to the findings of the EU antitrust analysis—”in close contact” with the U.S. Federal Trade Commission-—with the acquisition of the company that manufactures robots for the “smart home” revolution, Amazon would have been able to delist or unlist rival robot vacuum cleaners, reduce their visibility in its marketplace, restrict access to certain “commercially attractive” product labels, and increase rivals’ costs to advertise and sell their robot vacuum cleaners. “All of these foreclosure strategies could have limited competition in the robot vacuum cleaner market, leading to higher prices, lower quality, and less innovation for consumers,” the EU Commission found. After giving up the acquisition, Amazon will have to pay $94 million to the iRobot company for not completing the deal, but—due to the latter’s economic difficulties— the layoff of 350 workers (equal to 31 per cent of employees) has already been announced.