EC Opens Investigation of Amazon’s Planned Acquisition of iRobot

The European Commission (EC) has announced the launch of an in-depth investigation into the expected acquisition of iRobot by the e-commerce giant Amazon.

EC Opens Investigation of Amazon’s Planned Acquisition of iRobot

In this case, it does not mean the absolute beginning of an investigation, but the complication of the process in the sense of a more detailed study of the features of the planned transaction. During the initial analysis of the purchase of a company that manufactures robotics, problems were identified regarding the potentially possible negative impact of the deal on the state of affairs in the field of competition. The relevant information is contained in the press release of the EC, which was published last Thursday, July 6.

Margrethe Vestager, executive vice president in charge of competition policy in the European Union, says that Amazon operates in a dual status, being both an online platform and a retailer. According to her, this conditional dualism of the e-commerce giant’s business concept may be the reason that after the implementation of the deal to purchase a robotics manufacturer, the marketplace of the company headed by Andrew Jassy will be inaccessible to iRobot competitors.

Margrethe Vestager also said that an in-depth investigation will analyze the degree of probability that Amazon will start implementing the practice of using data collected by the manufacturer of robotic devices to strengthen its position as a retailer.

An Amazon representative, in response to a media request for comments on the EC’s actions against the e-commerce giant, said that the company continues to cooperate with the European authorities to answer all their questions and provide explanations regarding the concerns of regulators regarded with the deal.

The iRobot representative, speaking about the prospects of the company’s entry into the Amazon ownership structure, said that the successful implementation of the transaction would allow this manufacturer to accelerate the introduction of innovative solutions and activate the process of investing in critical functions while simultaneously reducing the cost of products for consumers. He also noted that the company offers its customers practical and inventive products, doing business in the face of fierce competition from other brands that supply vacuum cleaners to the market.

The EC press release contains a statement that the interim results of the investigation testified that the marketplace owned by Amazon is an important channel for the sale of robot vacuum cleaners. Considering this circumstance, the commission concluded that the e-commerce giant, having the mentioned virtual resource, can change the balance of power between the manufacturers of these products in terms of competition. The EC also states that Amazon may hinder the process of manufacturing robotic vacuum cleaners with Alexa voice assistant by companies that can influence the realization of the retailer’s financial interests in a certain way.

The commission press release indicates that an in-depth investigation will be conducted until November 15 this year, after which a final decision will be made on approving or banning the deal.

Amazon announced its intention to acquire the robotics manufacturer in August last year. The value of this transaction is $1.7 billion.

For Amazon, the implementation of this transaction could be a step to strengthen something like the internal ecosystem of consumer robotics. In September 2021, the company presented its Astro home robot. The deal can also strengthen and ensure the monetization of the network effect of the cross-activity of consumers connected to more than 300 million smart home devices.

As we have reported earlier, FTC Sues Amazon.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.