Amazon's acquisition deal with iRobot has turned even more heads in its direction.
The European Commission recently announced it is investigating Amazon's merger deal with iRobot as it would negatively affect competition and strengthen its position in the e-commerce market.
The European Commission isn't alone in investigating the acquisition deal between Amazon and iRobot - the FTC is also looking into it for similar reasons.
Amazon - iRobot Acquisition Investigation Details
In a recently published statement, the European Commission mentioned it had opened an in-depth investigation to assess the acquisition deal between Amazon and iRobot under the EU Merger Regulation.
The regulator is concerned that the acquisition deal would allow Amazon to acquire two things. The first, the ability to restrict competition in the market for the manufacturing and supply of robot vacuum cleaners (RVCs). Second, strengthen its position as an online marketplace provider to third-party sellers and/or other data-related markets and related advertising services.
The commission also found that should Amazon's acquisition deal with iRobot continues as planned, it could provide the incentive it needs to foreclose iRobot's rivals. The company could do so by preventing them from selling RVCs on Amazon's online marketplace and/or by degrading their access to it through several strategies.
These strategies include:
- Favoring iRobot's RVCs in both non-paid and paid results displayed in Amazon's marketplace
- Preventing iRobot's rivals from sourcing certain advertising services
- Raising the costs of iRobot's rivals to advertise and sell their RVCs on Amazon's marketplace
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The deal could also prevent iRobot rivals from accessing future Alexa APIs and the "Works with Alexa" certification, which Amazon could degrade if it went through. Many of the competitors' RVCs and their suppliers rely on the certification as selling points to compete on.
Last but not least, Amazon would have access to iRobot's users' data from information users provide to those iRobot's RVCs collect, including those from third parties. Thanks to these, Amazon could have an advantage in the market for online marketplace services to third-party sellers and/or other data-related markets.
The European Commision believes Amazon can get this advantage by giving better rank organic results and advertisements on its own marketplace, making it more difficult for rival marketplace providers to match Amazon's online marketplace services.
The commission will look into the concerns it found with the cooperation of other competition authorities and has until Nov. 15 to finalize its findings.
Investigations By Other Regulators
The European Commission is not the only regulator investigating Amazon's acquisition deal with iRobot. The FTC previously launched an investigation in 2022 after politicians from both parties requested the regulator to oppose the purchase, per Engadget.
While the U.K.'s Competition and Markets Authority was initially skeptical of Amazon's acquisition deal, it found that it would not lead to competition concerns in the U.K., according to its June 16 statement.
Whether Amazon can overcome the European Commission's challenge and get its clearance to acquire iRobot is up for debate. However, the company will "continue to work through the process with the European Commission and [is] focused on addressing its questions and any identified concerns at this stage," per a Reuters report citing a statement from an Amazon spokesperson.
Related Article: UK's CMA Launches Merger Inquiry of Amazon-iRobot Acquisition
