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The European Commission is concerned that the deal will restrict market competition and strengthen Amazon’s position as an ‘online marketplace provider’.
Amazon’s bid to buy Roomba maker iRobot is facing a new challenge, as the EU has launched an in-depth investigation into the deal.
The European Commission said it is concerned the deal will restrict competition in the market and strengthen Amazon’s position as an “online marketplace provider”. These concerns follow a preliminary investigation the Commission conducted on the deal.
This preliminary investigation found that Amazon’s online marketplace is an “important channel” to sell robot vacuum cleaners (RVCs) for several EU countries. This initial probe also found that Amazon could have the “ability and incentive” to stop iRobot rivals from selling on Amazon’s online store.
“Such foreclosure strategies could restrict competition in the market for the manufacturing and supply of RVCs, leading to higher prices, lower quality and less innovation for consumers,” the Commission said.
EU competition chief Margrethe Vestager said the in-depth probe will also investigate whether Amazon would use data collected by iRobot to strengthen its market position.
“We want to ensure that the acquisition of iRobot by Amazon does not have a negative impact on businesses and consumers, by distorting competition on the relevant markets,” Vestager said.
The Commission has until 15 November this year to make a decision on the deal. It also plans to work with other competition authorities in its investigation.
Roomba troubles for Amazon
Based in Massachusetts, iRobot designs and builds consumer robots such as the popular robot vacuum cleaner Roomba, first launched in 2002.
Amazon first announced plans to acquire iRobot last August. Senior vice-president of Amazon Devices, Dave Limp, said at the time that the iRobot team has “proven its ability to reinvent how people clean” with its products.
The deal has faced multiple regulatory hurdles since its announcement, with EU, UK and US authorities probing the acquisition.
The UK Competition and Markets Authority was initially hesitant to allow the deal to go through due to competition concerns, but gave the iRobot deal the green light last month.
Across the Atlantic, the US Federal Trade Commission is also taking an in-depth look at the deal, with an investigation that began last September.
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