Amazon’s acquisition of iRobot, the robot vacuum cleaner maker, for $1.7 billion (roughly Rs. 13,500 crore), is now facing a full-scale antitrust investigation by the European Union, according to sources familiar with the matter. This comes after Amazon obtained approval for the deal in the UK a few weeks ago.
In August of last year, Amazon announced its acquisition of iRobot, aiming to expand its range of smart devices, which includes the Alexa voice assistant, smart thermostats, security devices, and wall-mounted smart displays. iRobot is known for creating the first Roomba robot vacuum in 2002.
Following the publication of the Reuters story, iRobot shares experienced a significant drop of approximately 10%, marking their largest percentage decline since February of the previous year. Meanwhile, Amazon shares saw a slight reduction in gains.
The European Commission plans to initiate a four-month investigation after the preliminary review of the deal concludes on July 6. Sources indicate that during this initial phase, Amazon is unlikely to propose any remedies. However, they will have an opportunity in the next few days to persuade the EU competition watchdog that the deal promotes healthy competition, despite facing unfavorable odds.
Both the European Commission and Amazon declined to comment on the matter. Amazon has previously stated that the vacuum cleaner market is highly competitive, with numerous Chinese players in the industry.
Recently, the UK competition agency supported this argument in its decision, stating that it did not perceive Amazon utilizing its market power to harm other manufacturers of robot vacuum cleaners.
While Microsoft’s Activision deal was blocked, the European Commission granted clearance to the agreement under the condition that Microsoft engages in licensing deals with rival streaming platforms.
Antitrust regulators worldwide have become increasingly cautious about major tech companies acquiring smaller competitors, as they are concerned about the concentration of data in the hands of a few entities and the potential for dominant companies to extend their influence into new markets.
© Thomson Reuters 2023
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Deepak Sen is a tech enthusiast who covers the latest technological innovations, from AI to consumer gadgets. His articles provide readers with a glimpse into the ever-evolving world of technology.
