UPDATED 19:03 EDT / JULY 06 2023


European Commission launches investigation into Amazon’s acquisition of iRobot

The European Commission, the executive arm of the European Union, today announced an in-depth investigation into Amazon.com Inc.’s proposed acquisition of robotic vacuum cleaner company iRobot Corp.

Amazon announced in August last year that it had entered an agreement to acquire iRobot for $1.7 billion. Along with its Roomba line of robotic vacuum cleaners, the company also offers educational robots that are used to teach programming skills, a line of handheld vacuums, and air purifiers. When the deal was announced, it was as pitched as enhancing Amazon’s broader smart home portfolio, which includes products such as thermostats and doorbells.

In a statement, the EC said it was concerned that the transaction would allow Amazon to restrict competition for robot vacuum cleaners and strengthen its position as an online marketplace provider.

Full EC investigations don’t come before a preliminary investigation is undertaken and as reported in June, one has taken place. The preliminary investigation found that along with Amazon being an important channel to sell robotic vacuum cleaners, the e-commerce giant may be able to foreclose on iRobot’s rivals by preventing them from selling on its online marketplace or by degrading their access through several strategies.

The strategies identified in the preliminary investigation include favoring iRobot products in the Amazon marketplace, preventing competitors from sourcing certain advertising services, or raising the cost of iRobot’s rivals to advertise and sell their products on the Amazon marketplace. “Such foreclosure strategies could restrict competition in the market for the manufacturing and supply of RVCs, leading to higher prices, lower quality and less innovation for consumers,” the Commission said.

Other concerns raised included the potential that Amazon could also foreclose on iRobot rivals by restricting access to Alexa and that Amazon having access to iRobot data may provide Amazon with an important advantage in the market for online marketplace services and other data-related markets.

The Commission’s in-depth investigation has until Nov. 15 to decide whether any of the concerns found in the preliminary investigation warrants action.

The EC isn’t the first body to launch an investigation into the acquisition. The U.S. Federal Trade Commission launched a similar investigation in September. The FTC investigation is considering whether the deal will illegally boost Amazon’s market share in both the connected device market and the retail market and whether data generated about users of Roomba vacuums will give it an unfair advantage over other retailers.

Photo: iRobot

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