Amazon’s buyout of iRobot, the makers of Roomba, valued at $1.7 billion, is drawing regulatory attention not only domestically in the US, but also from European authorities. The European Commission has launched a detailed investigation into the deal, citing worries that it could hinder competition in the robotic vacuum cleaner market. The commission’s concerns mainly focus on the potential for Amazon to limit iRobot’s competitors from trading their products on its platform. It has been suggested that Amazon may give precedence to iRobot’s offerings in both sponsored and organic search results, or impose higher advertising fees for competitor products.
Additionally, the authorities are expressing apprehensions over the likelihood of Amazon barring iRobot’s competitors from utilizing forthcoming Alexa APIs or obtaining the “Works with Alexa” certification. Given the key role of voice assistant control in the appeal of robot vacuums, this potential restriction is significant. The commission has also voiced unease about Amazon gaining access to iRobot users’ data, arguing this could give the online retail giant a notable edge. For example, Amazon might utilize this data to fine-tune its ad targeting. The commission warned that the deal “could raise barriers to entry and expansion for Amazon’s competitors, to the detriment of consumers.”
The European Commission will be collaborating with other competition authorities in delving into these issues and aims to reach a conclusion by November 15th. Meanwhile, in the US, the Federal Trade Commission commenced an investigation into the deal last year, following calls from politicians across party lines to oppose the acquisition.
An Amazon representative informed Reuters that the company will “continue to cooperate with the European Commission, addressing its inquiries and any highlighted concerns at this stage.” The spokesperson also shared with the news outlet that Amazon could “provide a company like iRobot with the resources to boost innovation and develop key features, while also reducing prices for consumers.”
Frequently Asked Questions (FAQs) about Amazon iRobot Acquisition Investigation
What is the main reason for the EU’s investigation into Amazon’s acquisition of iRobot?
The European Commission is concerned that the acquisition could limit competition in the market for robotic vacuum cleaners. There’s apprehension that Amazon might restrict iRobot’s rivals from selling their products on its marketplace and favour iRobot’s offerings.
What are other concerns raised by the European Commission?
Apart from competition, the commission is concerned that Amazon might prevent rivals from accessing future Alexa APIs or getting the “Works with Alexa” certification, which are key selling points for robot vacuums. The commission also worries about Amazon obtaining access to iRobot user data for better ad personalisation.
When is the European Commission expected to finalize its investigation?
The commission plans to conclude its investigation by November 15th.
Is the acquisition being investigated only in Europe?
No, the acquisition is under scrutiny in the US as well. The Federal Trade Commission launched an investigation last year after calls from politicians across party lines to oppose the deal.
What is Amazon’s response to the investigation?
Amazon stated that it will continue to cooperate with the European Commission, addressing its inquiries and any identified concerns. The company believes that it can offer iRobot resources to boost innovation and develop key features while lowering prices for consumers.