EU blocks Amazon's $1.4 billion acquisition of iRobot

Regulators around the world have become more sensitive to big companies acquiring smaller startups. This is primarily due to their impact on the competition. One of the latest acquisitions facing setbacks from the European Union is Amazon’s deal with Roomba maker iRobot. The EU is now set to block the deal. The giant retailer needs to reassure regulators that the acquisition won’t harm the competition.

In late January 2023, the European Commission noted in its press releases that it has “informed Amazon of its preliminary view that its proposed acquisition of iRobot may restrict competition in the market for robot vacuum cleaners (‘RVCs’).”

The EU will block Amazon’s bid to buy iRobot

The EU Commission initiated an in-depth investigation into Amazon’s move due to the fact that Amazon sells RVCs from different brands in its online marketplace. The acquisition might lead to giving an unfair advantage to iRobot.

As The Wall Street Journal reported on Thursday, the EU Commission has notified Amazon of its latest decision in a bilateral meeting. The decision comes after the retailer failed to offer remedies to the EU until January 10 to mitigate concerns around iRobot’s acquisition. Roomba shares dropped by 40% following the announcement.

In January, an Amazon spokesperson told The Verge, “We continue to work through the process with the European Commission and are focused on addressing its questions and any identified concerns at this stage.”

The EU has blocked the Amazon/iRobot deal to preserve competition. However, Matt Schruers, president of tech lobbying group Computer and Communications Industry Association, says the move “makes no sense.” Because it leaves customers with fewer options. Schruers added regulators “cannot sweep that fact under the rug.”

Amazon’s intention to buy iRobot was publicly announced in August 2022. Since then, US, EU, and UK watchdogs have evaluated the deal to examine its contradictions with competition rules. The UK’s Competition and Markets Authority (CMA) cleared the deal in June. Meanwhile, the EU Antitrust Watchdog is determined to block it.