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Amazon Faces EU Probe into Irobot Acquisition

Amazon’s proposed $US1.7 billion acquisition of robot vacuum cleaner icon iRobot could bite the dust in Europe with regulators probing competitive trade concerns on various grounds.

Chief among them is that Amazon may disadvantage or freeze-out other robot vacuum cleaner (RVC) suppliers in its online marketplace.

“Amazon’s online marketplace is a particularly important channel to sell RVC’s in several EU Member States, the European Commission says in statement.

“Amazon may have the ability and the incentive to foreclose iRobot’s rivals by preventing them from selling RVCs on Amazon’s online marketplace and/or by degrading their access to it through several strategies.”

The commission says Amazon could prevent rivals accessing Alexa software such as application programming Interfaces and the ‘Works with Alexa’ certification.

Amazon marketplace

Another potential roadblock is that an Amazon-owned iRobot may suck up as much personal data as dirt under the carpet. This could be information provided by iRobot users, data collected by the vacuums or information collected by iRobot from third parties.

The commission’s stand is at odds with the UK’s Competition and Markets Authority which waved through the deal in June after investigating almost the same issues.

“iRobot’s market position in the supply of robot vacuum cleaners in the UK is modest and that it already faces several significant rivals,” the British body found.

“While Amazon could use its position as a major retailer to disadvantage rival robot vacuum cleaner manufacturers, it would lack the incentive to do so.” It said the acquisition of iRobot would not disadvantage Amazon’s rival smart home platforms.

The deal has also been subject to controversy in the US, with the Federal Trade Commission conducting its own probe egged on by the Biden administration which has taken aim at some big corporate mergers. Amazon has been in its cross hairs in several cases.

However, in June 2023, iRobot attained certification with the FTC for the deal.

Amazon announced the deal in August 2022, saying it would acquire iRobot for $US61 per share and $US1.7bn in cash. It said current iRobot chairman and CEO Colin Angle would stay on as CEO.

Margrethe Vestager, executive vice-president in charge of competition policy at the European Commission, said the body wanted to ensure Amazon’s acquisition did not distort competition in relevant markets.

Margrethe Vestager, European Commission.

“Amazon is both an online marketplace and a retailer. We are concerned that, by acquiring iRobot, Amazon may use such dual role to foreclose access by iRobot’s rivals to its marketplace. With our in-depth investigation, we will also investigate whether Amazon would use data collected by iRobot to strengthen its position as online marketplace provider.”

Amazon has said it will work cooperatively with regulators.

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