Amazon’s iRobot deal in EU antitrust crosshairs

By Foo Yun Chee

BRUSSELS (Reuters) -Amazon’s $1.7 billion acquisition of robot vacuum cleaner maker iRobot (NASDAQ:) may reduce competition and strengthen Amazon (NASDAQ:)’s position as online marketplace provider, EU antitrust regulators warned on Thursday.

The European Commission opened a full-scale investigation and will decide by November 15 whether to clear or block the deal.

“We continue to work through the process with the European Commission and are focused on addressing its questions and any identified concerns at this stage,” an Amazon spokesperson told Reuters.

Antitrust enforcers around the world have stepped up scrutiny of Big Tech acquiring smaller rivals, concerned about the accumulation of troves of data by a few companies, and big players leveraging their dominance into new markets.

The acquisition announced in August last year would add iRobot’s Roomba robot vacuum to Amazon’s 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. Amazon has previously said the vacuum cleaner market is very competitive, with lots of Chinese players.

“The Commission is concerned that the transaction would allow Amazon to restrict competition in the market for robot vacuum cleaners and to strengthen its position as online marketplace provider, ” the EU executive said.

“The Commission closely cooperated with other competition authorities during the initial investigation and will continue such cooperation during the in-depth investigation (…) the opening of an in-depth inquiry does not prejudge the outcome of the investigation”.

The Amazon spokesperson also said the company could “offer a company like iRobot the resources to accelerate innovation and invest in critical features while lowering prices for consumers.”

The EU competition enforcer’s decision confirmed a Reuters story last month and came a month after the UK antitrust agency cleared the deal unconditionally after a preliminary review.

At around 1800 GMT, Amazon shares were down 1.3% on Wall Street, underperforming the Dow Jones (-1.1%).