Amazon's Acquisition of iRobot Faces EU Antitrust Investigation, Sources Say

Amazon's $1.7 billion (roughly Rs. 13,500 crore) acquisition of robot vacuum cleaner maker iRobot faces a full-scale EU antitrust investigation, people familiar with the matter said, weeks after the US online retail giant won UK approval for the deal.

Amazon announced the takeover in August last year to expand its portfolio of smart devices, which include the Alexa voice assistant, smart thermostats, security devices and wall-mounted smart displays. IRobot made its first Roomba robot vacuum in 2002.

IRobot shares fell about 10 percent, their largest percentage drop since February last year, while Amazon shares trimmed gains after the Reuters story was published.

The European Commission is scheduled to launch a four-month investigation following the end of its preliminary review of the deal on July 6, the people said.

Amazon is unlikely to offer remedies during this initial phase, one of the people said. It has a final shot in the next few days at convincing the EU competition watchdog that the deal is pro-competitive, although the odds against it are high.

The Commission and Amazon declined to comment. Amazon has previously said the vacuum cleaner market is very competitive, with lots of Chinese players.

The UK competition agency in its decision last week backed the argument and said it did not see Amazon using its market power to disadvantage rival robot vacuum cleaner makers.

It blocked Microsoft's Activision deal while the Commission cleared the deal conditional on Microsoft's licensing deals with rival streaming platforms.

Antitrust enforcers worldwide have become more wary of Big Tech acquiring smaller rivals, concerned about the accumulation of troves of data by a few companies, and big companies leveraging their dominance into newer markets.

© Thomson Reuters 2023