The European Fee (EC) has introduced an in-depth investigation into Amazon’s proposed acquisition of iRobot over issues it might limit competitors within the robotic vacuum cleaner market.
Amazon’s $1.7 billion takeover was introduced almost a year ago, in August 2022, however the EC has now determined {that a} full investigation is critical to evaluate whether or not the merger might have an hostile affect available on the market for robotic vacuum cleaners.
The Fee’s issues seem to middle on Amazon itself being one of many prime (no pun supposed) marketplaces for promoting a variety of products, together with robotic vacuum cleaners, and that this may increasingly permit the corporate to advertise iRobot’s merchandise over these of rivals.
Amazon might have the power and the motivation to foreclose iRobot’s rivals by stopping them from promoting robo vacuums on Amazon’s on-line market and/or by degrading their entry to it by a number of methods, the EC acknowledged.
These methods would possibly embody favoring iRobot’s merchandise in each non-paid and paid outcomes (commercials) displayed in Amazon’s market, stopping rivals from accessing sure promoting providers, or mountaineering the costs for rivals to promote and promote their merchandise on Amazon.
One other concern is that Amazon would possibly forestall different robo vacuum makers from accessing the APIs for Amazon’s Alexa software program in addition to the “Works with Alexa” (WWA) certification, or in any other case hamper the interoperability of rival merchandise. The EC famous that entry by way of Alexa and WWA certification look like necessary promoting factors for such gadgets.
A 3rd situation is the person information collected by iRobot, which can present Amazon with a bonus in on-line market providers to third-party sellers, based on the EC. This would possibly allow Amazon to personalize and goal commercials, making it harder for rival suppliers to match Amazon’s on-line market providers.
“Amazon is each an internet market and a retailer. We’re involved that, by buying iRobot, Amazon might use such a twin function to foreclose entry by iRobot’s rivals to its market,” stated Govt Vice-President in command of competitors coverage Margrethe Vestager.
The EC stated that it had intently cooperated with different competitors authorities in the course of the preliminary investigation. The US Federal Commerce Fee opened its own investigation in September final yr, however has apparently nonetheless to announce a choice. The UK’s Competitors and Markets Authority watchdog gave its thumbs-up for the merger to go forward final month.
In an announcement, Amazon instructed us: “We proceed to work by the method with the European Fee and are targeted on addressing its questions and any recognized issues at this stage. iRobot, which faces intense competitors from different vacuum cleaner suppliers, provides sensible and creative merchandise. We imagine Amazon can supply an organization like iRobot the assets to speed up innovation and spend money on vital options whereas decreasing costs for customers.”
Colin Angle, chairman and CEO at iRobot, stated: “iRobot faces intense competitors in promoting vacuum cleaners, together with from China-based corporations. We had been happy with the CMA’s latest determination to clear the merger, and given the hyper aggressive atmosphere, we’re upset that the EC has determined to proceed to an in-depth investigation. We’re persevering with to work cooperatively with the EC and different regulators of their evaluation. We stay excited in regards to the alternative to work along with Amazon to proceed innovating, bringing priceless merchandise to prospects, and making their lives simpler.”
In its monetary outcomes for the primary quarter ended April 1, iRobot reported income of $160 million, down from $292 million in the identical interval a yr in the past. The corporate blamed “muted” orders in the course of the first quarter of 2023, however stated massive orders from an etailer buyer would ship in Q2. ®
