European Commission Set to Block Amazon’s Acquisition of iRobot
The European Union’s competition watchdog is poised to block Amazon.com’s $1.4 billion acquisition of robot vacuum maker iRobot, according to sources familiar with the matter, as reported by The Wall Street Journal on Thursday. Shares of iRobot, known for its Roomba vacuum, plummeted nearly 40% to $14.3 in after-hours trading following the news.
The Wall Street Journal stated that Amazon was notified during its meeting with European Commission officials on Thursday that the deal was likely to face rejection. However, Amazon declined to comment on the report.
The U.S. tech giant had until the January 10 deadline to propose remedies addressing the antitrust regulator’s concerns about potential competition restrictions in the robot vacuum cleaner market. The European Commission’s website provided an update on the matter.
Matt Schruers, president of the tech lobbying group Computer and Communications Industry Association, criticized the potential decision, stating, “If the objective is to have more competition in the home robotics sector, this makes no sense.” He further added, “Blocking this deal may well leave consumers with fewer options, and regulators cannot sweep that fact under the rug.”
Amazon had announced its intentions to acquire iRobot in August 2022, aiming to expand its array of smart devices, which includes the Alexa voice assistant, smart thermostats, security devices, and wall-mounted smart displays.
The European Commission, serving as the EU’s competition watchdog, was required to make a decision on the deal by February 14.
The anticipated blockage of the acquisition underscores the regulatory scrutiny faced by tech giants as they seek to expand their market presence through acquisitions. It also highlights the European Union’s commitment to maintaining fair competition within the region’s markets.
The rejection of Amazon’s bid to acquire iRobot is expected to have significant implications for both companies and the broader market for smart home devices. Investors will be closely monitoring developments as the European Commission’s decision could reshape the competitive landscape within the tech industry.
