European Commission initiates investigation into Amazon’s proposed purchase of iRobot

The European Commission (EC) has initiated an investigation, under the EU Merger Regulation, on the potential risks of Amazon’s proposed purchase of iRobot. Specifically, the EC examines the risk of Amazon limiting competition in the robot vacuum cleaners (RVCs) market and strengthening its position as an online marketplace provider to third-party sellers and other data-related markets.

Essentially, Amazon could use various strategies to disadvantage iRobot’s competitors in its marketplace. This includes favouring iRobot’s RVCs in search results and advertisements and raising costs for rivals to advertise and sell their RVCs. These foreclosure tactics could restrict competition, leading to higher prices, lower quality, and reduced consumer innovation.

Additionally, Amazon’s access to iRobot’s user data could provide an advantage in online marketplace services and advertising, making it difficult for rival marketplace providers to compete and potentially raising barriers for new entrants. The EC has collaborated closely with other competition authorities to assess the competition concerns. The EC noted that initiating the investigation does not predetermine its outcome.