Amazon’s purchase of iRobot could restrict competition, EU regulator warns

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Amazon’s planned $1.45bn acquisition of iRobot has drawn a formal objection from the EU’s antitrust regulator, which said the deal could allow the tech giant to use its dominance to punish rivals of the Roomba maker.

The EU, which has been conducting a in-depth probe of the acquisition announced last year, said in a statement of objections on Monday that the proposed deal “may restrict competition in the market for robot vacuum cleaners”.

The procedural step does not amount to a full veto of the deal, and Amazon can engage with the regulator to address its concerns. The EU has a February 14 deadline to reach a final decision.

Amazon said it would “continue to work through the process with the European Commission and [we are] focused on addressing its questions and any identified concerns”.

iRobot “faces intense competition from other vacuum cleaner suppliers”, and Amazon could provide it with “the resources to accelerate innovation”, the company added.

iRobot shares fell almost 20 per cent following the news.

Outlining its concerns, the EU said Amazon would be able to reduce the visibility of rival robot vacuum cleaners on its online marketplace — where many consumers in France, Germany, Spain and Italy are likely to go to buy them — in a number of ways, such as reducing their prominence in search results and denying them access to important product labels.

The US Federal Trade Commission has also been investigating the iRobot deal, but has yet to formally challenge it. It declined to comment on Monday.

Amazon — which operates in a wide array of sectors from ecommerce to cloud computing, video streaming and groceries — has for some time drawn the attention of competition regulators in the US, UK and EU.

The FTC filed a sweeping antitrust lawsuit against the company in September, alleging that it was using its monopoly power to hurt consumers, rivals and sellers.

Meanwhile, in December last year, Amazon reached a settlement with the EU antitrust regulator in which it agreed not to use the data of sellers on its marketplace to inform decisions relating to its own retail arm.

Amazon committed to treat all sellers on its marketplace equally when selecting products for its “Buy Box”, which boosts the profile of specific sellers to the top of a product page. It also agreed to set non-discriminatory conditions for access to its Prime label.