Antitrust Concerns: EU Expands Probe into Amazon’s iRobot Acquisition

by / ⠀Featured News / July 10, 2023…obot-acquisition/

Antitrust regulators in the European Union (EU) are looking closely at Amazon’s proposed acquisition of iRobot. The $1.7 billion deal, announced just under a year ago, has already been cleared by competition regulators in the UK. However, EU regulators have voiced worries about Amazon’s dominant position in the online marketplace and the impact on competition in the robot vacuum cleaner (RVC) industry.
This article examines the preliminary concerns raised by the European Commission, the potential consequences of the acquisition, and the possible outcomes of the investigation.

EU’s Concerns on Competition – In a news statement, the European Commission voiced its fear that the deal will give Amazon more power as an online marketplace provider and reduce competition in the RVC industry. The Commission identified Amazon’s marketplace as a crucial channel for selling RVCs in several EU Member States. iRobot is worried that Amazon, as both a retailer and an online marketplace, may try to shut out its competitors by blocking the sale of competing robot vacuums on its site. This might be accomplished through measures like giving one’s own iRobot kit preference in ad listings and preventing competitors from using particular ad providers, both of which would increase prices for rivals and reduce customer options.

The Commission also expressed concerns about the potential closure or downgrading of rivals’ access to Amazon’s AI assistant software, Alexa. Interoperability with Alexa software and access to the “Works With Alexa” certification are essential selling points for RVC manufacturers and suppliers to compete. If Amazon controls iRobot’s access to these resources, it could create a significant barrier for rivals and limit innovation in the RVC market.

The Commission also pointed up Amazon’s data advantage from acquiring iRobot. If Amazon were to buy iRobot, it would have access to user data gathered by iRobot’s robot vacuums and other sources. Because of its data advantages, Amazon may be able to rank organic results and adverts higher on its marketplace, making it harder for competitors to offer similar services. According to the Commission’s analysis, this might have a chilling effect on competition by lowering customer choice and increasing business costs for Amazon.

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In-depth Investigation and Potential Outcomes – The European Commission will conduct a thorough study of the proposed transaction to resolve its early concerns. Clearance from regulators is due by November 15th. The Commission is more likely to require behavioral remedies from Amazon rather than stop the acquisition if competition concerns persist. The EU often accepts tech mergers, even when concerns are raised, by imposing limits designed to overcome any antitrust issues.

One such example is the EU’s clearance of Google’s acquisition of Fitbit at the end of 2020. Google made other promises that were accepted by the EU, including a ten-year restriction on utilizing health data for marketing and a promise to allow users in that region to stream all current and future Activision games via competitor cloud gaming providers. However, it is worth noting that the UK has blocked Microsoft’s planned acquisition of Activision, demonstrating that regulatory decisions can differ across jurisdictions.

Even when other authorities are more likely to reject acquisitions, the EU shows less inclination to prohibit technological mergers. Microsoft’s acquisition of Activision was approved by the EU in May but was vetoed by the United Kingdom in April. It has also been stated that the US Federal Trade Commission (FTC) is trying to get an injunction to stop the deal from going through. What remedies, if any, will be imposed on Amazon to address the antitrust concerns is yet unknown as the EU continues to investigate the iRobot acquisition.

Amazon’s Response and Future Implications – Amazon remains committed to the acquisition and is working through the process with the European Commission. In a statement, an Amazon spokesperson emphasized that the company believes it can offer iRobot the resources to accelerate innovation, invest in critical features, and lower prices for consumers. However, the outcome of the investigation will determine whether the acquisition proceeds without any major changes or if Amazon is required to make behavioral changes to address the EU’s concerns.

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The investigation into Amazon’s acquisition of iRobot has broader implications for the tech industry and the regulatory landscape. It highlights the increasing speculation that tech giants face in their acquisition strategies and the potential risks associated with consolidating market power. As regulators continue to monitor these transactions closely, it is crucial for companies to consider the competitive implications before proceeding with mergers and acquisitions.

Conclusion – The EU’s in-depth investigation into Amazon’s planned acquisition of iRobot reflects growing concerns about competition and market dominance in the tech industry. The European Commission’s preliminary concerns about potential foreclosure strategies, data advantage, and restrictions on rivals’ access to Amazon’s marketplace and AI assistant software raise important questions about the impact of the acquisition on the RVC market and online marketplace competition.

As the investigation unfolds, it remains to be seen whether the EU will impose behavioral remedies on Amazon or block the acquisition altogether. This case serves as a reminder to companies of the need to carefully consider the potential antitrust implications of their merger and acquisition strategies. The outcome of this investigation will have significant implications for the tech industry and regulatory landscape, shaping the future of competition in the European market.


Q: What is the current status of Amazon’s acquisition of iRobot?

A: The acquisition is currently under in-depth antitrust inspection by the European Union. The deal has already been cleared by competition regulators in the UK.

Q: What are the main concerns of the European Commission regarding the acquisition?

A: The European Commission is worried that Amazon may limit competition and increase its dominance in the market for robot vacuum cleaners (RVCs). The Commission is particularly worried about foreclosure strategies, data advantage, and restrictions on rivals’ access to Amazon’s marketplace and AI assistant software.

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Q: What could be the consequences of the acquisition if approved?

A: If approved, the acquisition could result in higher prices, lower quality, and less innovation for consumers in the RVC market. It could also impact competition in the online marketplace, raising barriers to entry and expansion for Amazon’s competitors.

Q: How will the European Commission investigate the acquisition? A: The European Commission will conduct an in-depth investigation to determine whether its preliminary concerns are merited. Regulators have until November 15 to make a decision on clearance.

Q: What remedies could the European Commission seek from Amazon?

A: If competition concerns remain, the European Commission is likely to seek behavioral remedies from Amazon to address the antitrust issues. The EU has a history of approving tech mergers with conditions to mitigate potential antitrust risks.

Q: What are the broader implications of this investigation?

A: The investigation highlights the increasing inspection that tech giants face in their acquisition strategies and the potential risks associated with consolidating market power. It also underscores the need for companies to carefully consider the competitive implications of their M&A activities.


First reported on TechCrunch

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