Amazon’s acquisition of iRobot is under a cloud after the tech giant missed a key deadline to address competition issues with EU regulators.
The US$1.4 billion deal to buy the robot vacuum maker was seen as an important part of Amazon expanding its capability in the smart home market.
However, The European Commission saw the deal as a threat to competition. Concerns included the disadvantage it represented to rival robot vacuum cleaners in Amazon’s online marketplace.
“Amazon may have the ability and the incentive to foreclose iRobot’s rivals by engaging in several foreclosing strategies aimed at preventing rivals from selling RVCs on Amazon’s online marketplace and/or at degrading their access to it,” the European Commission said in a statement in November.
Robot vacuum cleaners sell in European Union countries, particularly in France, Germany, Spain and Italy.
Amazon had until Wednesday to address concerns but failed to lodge the required documentation.
That could see either Amazon vetoing the deal, or it could signal some agreement behind closed doors.
Reuters in November reported that the commissioner’s lawyers believed an undertaking was not necessary, and therefore the acquisition could be approved automatically.
In December 2023, Channel News Australia reported that EU interim competition chief Didier Reynders had warned that Amazon must pledge to fairly rank rival robot vacuum cleaners on its global web sites.
“The main issue is to be sure to have a fair treatment of all the different actors,” Didier Reynders, the EU’s acting commissioner for competition, told reporters after an event in Brussels.
Reynder’s claims that Amazon should commit to ensuring the visibility of correct and transparent information on rival vacuums and rank them fairly on the company’s marketplace platform.
Bloomberg reported that the EU’s antitrust arm believes that Amazon could be tempted to demote other robot vacuum cleaners on its platform and promote its own products with such labels as “Amazon’s choice” or “Works With Alexa.”
The commission also said Amazon may find it “economically profitable” to shut out rivals.
Most merging companies avoid a veto by addressing competition issues.
