Amazon iRobot Deal Faces EU Antitrust Scrutiny

EU regulator formally objects to Amazon's $1.45 billion acquisition of iRobot, citing competition concerns in the robot vacuum market.

What are the EU's concerns about Amazon acquiring iRobot?

The European Union's antitrust regulator has issued a formal objection to Amazon's proposed $1.45 billion acquisition of iRobot, the company known for its Roomba robotic vacuum cleaners. The EU's in-depth investigation, initiated following the announcement of the deal last year, has raised concerns that the acquisition could limit competition in the robot vacuum cleaner market.

While this procedural step does not equate to an outright veto, it signals significant regulatory hurdles. Amazon has until February 14 to respond and potentially address the EU's reservations. The company has expressed its commitment to working with the European Commission to alleviate any concerns raised.

Chart: Robotic vacuum cleaner use
Robotic vacuum cleaners have shown a rapid increase in use (Chart: Grand View Research)

Market Dominance And Competitive Concerns

The EU's objections center around Amazon's potential to use its market dominance to disadvantage iRobot's rivals. Specifically, the regulator highlighted the risk of Amazon diminishing the visibility of competing robot vacuum cleaners on its online marketplace. This could manifest in various ways, including altering search result rankings or restricting access to key product labels, a significant concern for consumers in countries like France, Germany, Spain, and Italy.

Amazon's response emphasized iRobot's existing competition and the potential benefits of the acquisition, including increased resources for innovation. However, iRobot's shares dipped nearly 20% following the announcement of the EU's objections.

Broader Regulatory Scrutiny Of Amazon

This development adds to a series of regulatory challenges Amazon faces across various jurisdictions. In the United States, the Federal Trade Commission (FTC) is also examining the iRobot deal but has not yet taken formal action. Amazon's diverse operations, spanning e-commerce, cloud computing, video streaming, and groceries, have long attracted the scrutiny of antitrust authorities in the US, UK, and EU.

The FTC previously filed a comprehensive antitrust lawsuit against Amazon, alleging the company's misuse of monopoly power to the detriment of consumers, competitors, and sellers. Additionally, in a recent settlement with the EU antitrust regulator, Amazon agreed to avoid using marketplace seller data to benefit its retail operations. The company also committed to equitable treatment of all sellers, particularly in relation to its prominent "Buy Box" feature and access to its Prime label.

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