EU Set to Block Amazon’s $1.4 Billion Acquisition of iRobot

European Union antitrust regulators are poised to block Amazon’s $1.4 billion acquisition of robot vacuum maker iRobot, according to three sources familiar with the matter. The move underscores heightened scrutiny of Big Tech deals by enforcers.

Despite warnings from the European Commission regarding potential competition restrictions in the robot vacuum cleaner market, Amazon chose not to offer remedies to address these concerns, defying the Commission’s stance.

Both the Commission and Amazon declined to comment on the situation. The Commission is slated to decide on the deal by February 14.

As of now, the major and primary concern raised by the regulator is regarding the possibility of Amazon impeding iRobot’s competitors, especially in its online market space, that too in key European markets like France, Germany, Italy, and Spain.

However, potential problems can be mitigated with the anticipated EU tech regulations like the Digital Markets Act, the Commission is relying on its enactment. This reluctance stems from the lengthy enforcement process which is in association with the legislation. Another fact about it is that it is yet to be tested in court. Moreover, the Commission is leaning towards blocking the deal outright.

Should the acquisition be vetoed, it would set a significant precedent for future Amazon acquisitions in the EU. Antitrust enforcers are likely to demand substantial remedies in exchange for approval, raising the bar for online rivals seeking to merge with the retail giant.

Following the news, iRobot shares saw a sharp decline, dropping by 30% in late trading.

The potential blockage of the acquisition reflects broader efforts by EU regulators to rein in the market power of tech giants like Amazon and ensure fair competition in the digital marketplace.

As the situation unfolds, stakeholders are closely monitoring developments and awaiting the Commission’s final decision on the fate of the Amazon-iRobot deal.

The European Union’s stance underscores the growing importance of antitrust scrutiny in the tech sector, particularly as regulators seek to address concerns surrounding market dominance and competition in the digital age.