Amazon backs out of iRobot deal
European regulators stepped in, and Amazon stepped out.
That’s one way to describe a broken deal between the world’s largest internet retailer and iRobot, maker of the Roomba vacuum, which can often be spotted at industry trade shows as it cleans floors and carpets all by itself.
Amazon agreed to by iRobot, which also makes air-purification systems and robotic mops, among other home products, back in August 2022. In backing away from the deal, Amazon will pay a $94 million termination fee.
Raising concerns over the deal, regulators wrote that if the deal went through as planned, competition would suffer as Amazon would gain a potentially powerful edge by controlling the online sale of self-driving vacuum cleaners and other home products made by iRobot.
In a statement, the European Commission’s Executive Vice President Margrethe Vestager, a top anti-trust regulator, wrote:
“We looked closely at the dual role of Amazon as platform operator and market participant, and the implications of Amazon merging with the owner of a very successful product for which Amazon is already an important sales channel. During our investigation, we have been in close contact with the US Federal Trade Commission.
“Our in-depth investigation preliminarily showed that the acquisition of iRobot would have enabled Amazon to foreclose iRobot’s rivals by restricting or degrading access to the Amazon Stores.”
Amazon on Monday said the purchase would have allowed the tech giant to invest in continued innovation by iRobot and support iRobot in lowering prices on products.
“We’re disappointed that Amazon’s acquisition of iRobot could not proceed,” said David Zapolsky, Amazon SVP and general counsel “We’re believers in the future of consumer robotics in the home and have always been fans of iRobot’s products, which delight consumers and solve problems in ways that improve their lives.”
In his statement he added: “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 same statement, iRobot founder Colin Angle said: “The termination of the agreement with Amazon is disappointing but iRobot now turns toward the future with a focus and commitment to continue building thoughtful robots and intelligent home innovations.
Vestager, the European regulator, included in the commission’s statement that iRobot is one of the main robot vacuum cleaner suppliers in the European Economic Area. She added: “Amazon is both a retailer and an online marketplace operating local marketplaces in several Member States. Amazon Stores are the main sales and discovery channel for robot vacuum cleaners customers in the EEA, and in particular in France, Germany, Italy and Spain.”
