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The U.S. Federal Trade Commission has begun a review into Amazon.com Inc.’s $1.7 billion planned acquisition of iRobot Corp., the company behind the Roomba brand of robot vacuum cleaners, Politico reported late Friday.
The deal, announced Aug. 5, would see Amazon acquire not only the Roomba robotic vacuum line but also educational robots that are used to teach programming skills, a line of handheld vacuums and air purifiers. That last is through Airis Cleantec AG, which iRobot purchased last year.
Acquiring iRobot would enhance Amazon’s broader smart home portfolio, which includes products such as thermostats and doorbells. Amazon acquired Ring Inc., a maker of smart home devices in 2018.
The FTC review is not a surprise. Such reviews are typical when one large company moves to acquire another large company, although the speed at which the investigation has been launched is somewhat notable. The review will consider if the deal violates antitrust law, with both companies said to be bracing for a potentially lengthy and arduous investigation.
Under consideration by the FTC is whether the deal will illegally boost Amazon’s market share in both the connected device market and the retail market, according to Politico. The review will also investigate whether data generated about users of Roomba vacuums will give it an unfair advantage over other retailers.
Using Roomba, Amazon could, in theory at least, use detailed home maps generated by the vacuum cleaners to recommend products based on those maps. Although using such data sounds very Big Brother, it could be integrated into Amazon’s broader suggestion algorithms.
News of the review into the iRobot acquisition comes after Amazon disclosed Sept. 2 that it had received a request for more information from the FTC into its planned $3.9 billion acquisition of 1Life Healthcare Inc., a company that runs primary-care clinics under the name One Medical.
As with the iRobot deal, a review into the 1Life Healthcare deal is fairly standard for the FTC, although there is one complicating factor: FTC Chairwoman Lina Khan, who was appointed to the position in June 2021, is a longtime critic of Amazon.
Khan wrote an article in 2017 arguing that Amazon’s conglomerate structure should not have escaped previous antitrust security. She also highlighted in the article concerns around how Amazon could use user data to battle rivals, a concern now raised with both the iRobot and 1Life Healthcare acquisitions.
There is no suggestion that Khan will not treat Amazon fairly. However, under her leadership, the FTC will likely pay much closer scrutiny to both deals. In previous years, the FTC may not have scrutinized the deals as closely, since the commission had a more lax stance when it came to scrutinizing acquisitions.
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