EU regulator warns that Amazon’s acquisition of iRobot may restrict competition

Amazon’s proposed $1.45bn purchase of iRobot drew a formal opposition from the EU’s Antitrust regulator. The regulator said that the deal would allow Amazon to use its dominant position to punish competitors of the Roomba manufacturer.

In a Monday statement of opposition, the EU, which has been conducting an in-depth investigation into the acquisition announced last summer, stated that the proposed agreement could “restrict competition on the market for robotic vacuum cleaners”.

This procedural step is not a veto. Amazon may engage the regulator in order to voice its concerns. The EU must reach a decision by February 14.

Amazon stated that it would “continue working through the process with European Commission, and [we] are focused on addressing any questions and concerns identified”.

Amazon, the company said, could give iRobot the resources it needs to “accelerate innovation” and “address intense competition with other vacuum cleaner manufacturers”.

iRobot’s shares dropped by almost 20% following the news.

Amazon could reduce the visibility and prominence of competing robot vacuum cleaners in its online marketplace, where many consumers from France, Germany and Spain are likely to purchase them.

US Federal Trade Commission is also investigating the iRobot agreement, but it has not yet formally challenged it. On Monday, it declined to comment.

Amazon, which is active in many sectors, including ecommerce, cloud computing, video streaming, and groceries, has attracted the attention of regulators of the US, UK, and EU for some time.

The FTC filed an antitrust lawsuit in September against the company, claiming that it used its monopoly to harm consumers, competitors and sellers.

Amazon also reached an agreement with the EU’s antitrust regulator last December, whereby it agreed to refrain from using the data provided by sellers on its platform to make decisions about its retail arm.

Amazon has committed to treating all sellers equally when choosing products for the “Buy Box” which places specific sellers at the top of product pages. Amazon also agreed to establish non-discriminatory access conditions to its Prime label.