Amazon has walked away from the proposed A$2.2-billion-dollar iRobot deal with the desperate US robotic vacuum cleaner Company immediately moving to dump staff and cut costs as they look to preserve their remaining capital.

The Company whose products are distributed widely in Australia by Melbourne based IXL Home have been struggling as Chinese competitors such as Ecovacs strips share in what is now a fast-growing market.

As ChannelNews tipped the fallout came quickly with over 30% of their workforce sacked immediately following a decision by the European Union to knock back the proposed acquisition by Amazon.

Many iRobot customers including several in Australia, expressed concerns about the further sway Amazon would have on the smart home industry and the privacy implications for users, if the deal to a acquire the robot vacuum cleaner company went ahead.

This was given Amazon’s ownership of Ring and Eufy as well as its own-branded Alexa-powered speakers, smart displays, TVs, thermostats and more. Plus there’s deep integration with other brands’ smart home products via Alexa. Adding everything iRobot knows about its customers’ homes and habits would have been something to be wary of in terms of privacy.

Shares in the Company tumbled close to 20% on the news with questions now being raised as to whether a Chinese Company will acquire the US brand.

Chief Executive Officer Colin Angle also stepped down with the Company struggling to identify where their future is.

Amazon said that the decision to scrap the deal was mutual and Amazon would pay the previously agreed $94m break-up fee.

“This outcome will deny consumers faster innovation and more competitive prices, which we’re confident would have made their lives easier and more enjoyable,” said David Zapolsky, Amazon senior vice president and general counsel.

He said mergers are intended to help companies like iRobot compete with rivals.

“Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition – the very things that regulators say they’re trying to protect.”

In the UK, the Competition and Markets Authority (CMA) gave the deal the all-clear last year, finding that Roomba’s place in the UK market was “modest” and that it already faced several significant rivals according to Bloomberg.

But European competition authorities were worried that iRobot’s tie-up with Amazon would make it difficult for other vacuum-makers to compete, especially if Amazon were to give the Roomba benefits over rivals on its e-commerce site.

The data collected by Roomba had also raised questions.

The European Commission opened a formal investigation last year and had a deadline of 14 February to make its decision. It indicated earlier this month it was prepared to block the deal.

The takeover also faced scrutiny in the US, where officials in the Biden administration have been taking a harder line on mergers, challenging high-profile deals in the airline industry, as well as pushing back against the tech giants.