On July 6, 2023, the European Commission announced the initiation of an in-depth investigation into the proposed acquisition of iRobot by Amazon, out of concern that the transaction could both strengthen Amazon’s position as an online marketplace, and restrict competition in the market for robot vacuum cleaners. Both Amazon and iRobot are US-based companies; the former is both an online marketplace and a retailer of products, including robot vacuum cleaners, while iRobot manufactures such vacuum cleaners and sells them on Amazon’s online marketplace.
The Phase II investigation, conducted pursuant to the EU Merger Regulation, is based on the European Commission’s preliminary findings that, given the importance of Amazon’s online marketplace as a channel for the sale of robot vacuum cleaners in several EU member states, the company may have both the ability and the incentive to foreclose iRobot’s rivals by:
- favoring iRobot’s products in advertisements on Amazon’s marketplace;
- preventing iRobot’s rivals from sourcing advertising services, or raising the costs of advertising for iRobot’s rivals;
- preventing iRobot’s rivals from accessing application program interfaces of Amazon’s Alexa software, or by limiting rivals’ interoperability with Alexa;
- obtaining access to the data of iRobot users, potentially giving Amazon an important advantage in the market for online marketplace services and resulting in barriers to entry and expansion for Amazon’s competitors.
The proposed acquisition was notified to the Commission on June 1, 2023; the Commission must complete its investigation and adopt a decision within 90 working days.