European regulators have raised concerns about Amazon’s proposed acquisition of iRobot, stating that it may harm competition in the market. The European Commission, the European Union’s executive arm and top antitrust enforcer, has informed Amazon of its preliminary view regarding the deal. The commission has been investigating the proposed acquisition since July and has found that it may hinder iRobot’s competitors from effectively competing on Amazon’s marketplace.
The European regulators have highlighted that Amazon’s marketplace is an important platform for sales of robot vacuum cleaners in several European countries, including France, Germany, Italy, and Spain. They believe that if the deal goes through, Amazon may be incentivized to prevent competitors from selling their products on its marketplace or make it difficult for them to do so.
The commission has identified several potential anti-competitive practices that Amazon could engage in if the acquisition is approved. These practices include reducing the visibility of a competitor’s product on Amazon’s marketplace, limiting access to certain labels that may attract more shoppers, and raising the costs of iRobot’s rivals to advertise and sell their products on the platform.
The news of the European regulators’ concerns has affected iRobot’s stock, with shares in the company declining by more than 17% on Monday. Investors are worried about the potential impact of the acquisition on iRobot’s competitiveness in the market.
Amazon’s spokesperson, Alexandra Miller, has stated that the company is working with the commission and is focused on addressing its questions. Miller believes that Amazon can offer iRobot the resources to accelerate innovation and invest in critical features while also lowering prices for consumers.
The commission has until February 14th to make a final decision on the deal. Amazon may respond to some of the objections raised by the European regulators.
It’s worth noting that Amazon’s acquisition of iRobot was announced last year for $1.7 billion. However, the value of the deal has declined by 15% after iRobot incurred new debt. The acquisition is still facing a review in the United States by the Federal Trade Commission.
Despite the concerns raised by the European regulators, British antitrust regulators cleared Amazon’s purchase of iRobot in June. The deal is seen as a potential expansion of Amazon’s dominance in the smart home market.
Amazon’s stock finished up less than 1% on Monday.
