EU regulators say Amazon's acquisition of vacuum maker iRobot may harm competition

EU regulators say Amazon's acquisition of vacuum maker iRobot may harm competition

European regulators say Amazon’s proposed acquisition of robot vacuum maker iRobot may harm competition

ByHALELUYA HADERO AP business writer

November 27, 2023, 4:38 PM

FILE – An Amazon company logo is seen on the facade of a company’s building in Schoenefeld near Berlin, March 18, 2022. European regulators said Monday, Nov. 27, 2023, that Amazon’s proposed acquisition of robot vacuum maker iRobot may harm competition. (AP Photo/Michael Sohn, File)The Associated Press

European regulators said Monday that Amazon’s proposed acquisition of robot vacuum maker iRobot may harm competition.

The European Commission, the European Union’s executive arm and top antitrust enforcer, said it has informed Amazon of its “preliminary view” regarding the deal following an investigation that began in July.

The news raised investors' concerns about the acquisition, sending shares in Bedford, Massachusetts-based iRobot Corp., most famous for the circular-shaped Roomba vacuum, down more than 17% Monday.

The European regulators raised concerns that the buyout may hinder iRobot’s rivals from effectively competing on Amazon’s marketplace, which they said is an important platform for sales of robot vacuum cleaners in France, Germany, Italy and Spain.

If the deal goes through, the commission said Amazon may be incentivized to prevent competitors from selling their products on its marketplace or making it difficult for them to do so.

Among other things, it said Amazon could reduce the visibility of a competitor’s product on its marketplace or limit access to certain labels, such as “Amazon’s choice,” that may attract more shoppers. It may also find ways to raise the costs of iRobot’s rivals to advertise and sell their products on its platform, the commission said.

The commission has until Feb. 14 to make a final decision on the deal. And Amazon may respond to some of the objections raised.

Alexandra Miller, an Amazon spokesperson, said the Seattle-based company is working with the commission and is focused on addressing its questions.

“IRobot, which faces intense competition from other vacuum cleaner suppliers, offers practical and inventive products,” Miller said. “We believe Amazon can offer a company like iRobot the resources to accelerate innovation and invest in critical features while lowering prices for consumers.”

Amazon’s acquisition iRobot was announced last year for $1.7 billion, but the value of the deal has since declined by 15% after vacuum maker incurred new debt.

Anti-monopoly organizations have voiced concerns about the deal, saying that it would broaden the e-commerce giant’s dominance in the smart home market.

But British antitrust regulators cleared Amazon’s purchase of iRobot back in June. The acquisition is still facing a review in the U.S. by the Federal Trade Commission.

Amazon's stock finished up less than 1% Monday.