The Commission takes note of Amazon’s and iRobot’s decision to terminate their agreement according to which Amazon intended to acquire sole control over iRobot. The abandonment follows the findings of the Commission’s in-depth investigation and the sending of a Statement of Objections on 27 November 2023.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said:
‘iRobot manufactures robot vacuum cleaners. Its flagship brand is the well-known ‘Roomba’. iRobot is one of the main robot vacuum cleaners suppliers in the European Economic Area (‘EEA’) and notably in several Member States. Amazon is both a retailer and an online marketplace operating local marketplaces in several Member States – the Amazon Stores. Amazon Stores are the main sales and discovery channel for robot vacuum cleaners customers in the EEA, and in particular in France, Germany, Italy and Spain.
Robot vacuum cleaners are part of the ‘smart home’ revolution seeking to digitalise our homes and to make domestic life easier. Amazon already has some “smart home” devices such as the voice assistant Alexa or the smart doorbell Ring, and in 2022 it wanted to buy iRobot for approximately €1.56 billion.
We looked closely at the dual role of Amazon as platform operator and market participant, and the implications of Amazon merging with the owner of a very successful product for which Amazon is already an important sales channel. During our investigation, we have been in close contact with the US Federal Trade Commission.
Our in-depth investigation preliminarily showed that the acquisition of iRobot would have enabled Amazon to foreclose iRobot’s rivals by restricting or degrading access to the Amazon Stores. For example, Amazon would have been in a position to (i) delist or not list rival robot vacuum cleaners; (ii) reduce visibility of rival robot vacuum cleaners displayed in Amazon’s marketplace; (iii) limit access to certain widgets or certain commercially attractive product labels; or (iv) raise the costs of iRobot’s rivals to advertise and sell their robot vacuum cleaners on Amazon’s marketplace. We also preliminarily found that Amazon would have had the incentive to foreclose iRobot’s rivals because it would have been economically profitable to do so. All such foreclosure strategies could have restricted competition in the market for robot vacuum cleaners, leading to higher prices, lower quality, and less innovation for consumers.
Finally, when assessing transactions of this kind, it is key to take into account what the transaction would mean for rivals and customers of the merged entity. This applies in particular to transactions by which large, established sales channels acquire suppliers that are heavily dependent on the acquirer’s infrastructure and customer reach to be successful in the EEA market.
Source – EU Commission
Amazon and iRobot agree to terminate pending acquisition
Amazon’s proposed acquisition of iRobot has no path to regulatory approval in the European Union, preventing Amazon and iRobot from moving forward together—a loss for consumers, competition, and innovation.
SEATTLE and BEDFORD, Mass., Jan. 29, 2024
Today Amazon (NASDAQ: AMZN) and iRobot (NASDAQ: IRBT) announced that they have entered into a mutual agreement to terminate their previously announced acquisition agreement, originally signed on August 4, 2022, under which Amazon would have acquired iRobot for cash consideration. This deal would have allowed Amazon to invest in continued innovation by iRobot and support iRobot in lowering prices on products customers already love. The companies released the following statements today about the decision:
“We’re disappointed that Amazon’s acquisition of iRobot could not proceed,” said David Zapolsky, Amazon SVP and General Counsel. “We’re believers in the future of consumer robotics in the home and have always been fans of iRobot’s products, which delight consumers and solve problems in ways that improve their lives. Amazon and iRobot were excited to see what our teams could build together, and we’re deeply grateful to everyone who worked tirelessly to try and make this collaboration a reality. This outcome will deny consumers faster innovation and more competitive prices, which we’re confident would have made their lives easier and more enjoyable. Mergers and acquisitions like this help companies like iRobot better compete in the global marketplace, particularly against companies, and from countries, that aren’t subject to the same regulatory requirements in fast-moving technology segments like robotics. Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition—the very things that regulators say they’re trying to protect.”
“iRobot is an innovation pioneer with a clear vision to make consumer robots a reality,” said Colin Angle, Founder of iRobot. “The termination of the agreement with Amazon is disappointing, but iRobot now turns toward the future with a focus and commitment to continue building thoughtful robots and intelligent home innovations that make life better, and that our customers around the world love.”
The companies have signed a termination agreement that resolves all outstanding matters from the transaction, including Amazon paying iRobot the previously agreed upon termination fee.
About Amazon
Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Amazon strives to be Earth’s Most Customer-Centric Company, Earth’s Best Employer, and Earth’s Safest Place to Work. Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Career Choice, Fire tablets, Fire TV, Amazon Echo, Alexa, Just Walk Out technology, Amazon Studios, and The Climate Pledge are some of the things pioneered by Amazon. For more information, follow @AmazonNews.
About iRobot
iRobot is a global consumer robot company that designs and builds thoughtful robots and intelligent home innovations that make life better. iRobot introduced the first Roomba robot vacuum in 2002. Today, iRobot is a global enterprise that has sold more than 50 million robots worldwide. iRobot’s product portfolio features technologies and advanced concepts in cleaning, mapping and navigation. Working from this portfolio, iRobot engineers are building robots and smart home devices to help consumers make their homes easier to maintain and healthier places to live. For more information about iRobot, please visit www.irobot.com.
Source – iRobot Corporation
Source: Amazon