(CTN News) – On Monday, European regulators expressed their concerns about the potential negative impact on competition from Amazon’s planned purchase of iRobot, a leading manufacturer of robot vacuums.
The European Commission, which serves as the executive body of the European Union and oversees antitrust matters, has shared its initial perspective on the deal with Amazon after conducting an investigation that commenced in July.
This announcement has caused apprehension among investors, resulting in a significant decrease of over 17% in the stock value of iRobot Corp., headquartered in Bedford, Massachusetts, renowned for its popular Roomba vacuum with a circular design.
The buyout has raised concerns among European regulators who fear that it may impede iRobot’s competitors from effectively competing in marketplace.
They argue that Amazon’s marketplace is a crucial platform for the sales of robot vacuum cleaners in France, Germany, Italy, and Spain. If the deal is finalized, the commission warns that might be motivated to hinder competitors from selling their products on its marketplace or create obstacles for them to do so.
In addition, the commission stated that Amazon has the ability to decrease the exposure of a competitor’s item on its marketplace or restrict the availability of specific labels, such as “Amazon’s choice,” which could entice more customers.
The commission also suggested that could potentially increase the expenses for iRobot’s competitors to promote and sell their products on its platform. The commission has until February 14th to reach a final verdict on the agreement and may choose to address some of the concerns that have been raised.
Alexandra Miller, a representative from Amazon, stated that the company, headquartered in Seattle, is collaborating with the commission and is dedicated to resolving their inquiries.
Miller expressed, “IRobot, amidst fierce competition from other suppliers of vacuum cleaners, provides practical and innovative products.
We are confident that Amazon can provide a company like iRobot with the necessary resources to expedite innovation and invest in essential features, all while reducing prices for consumers.”
The acquisition of iRobot by Amazon was announced last year for $1.7 billion;
however, the value of the agreement has subsequently decreased by 15% due to the vacuum maker incurring additional debt.
The deal has raised concerns among anti-monopoly organizations, who argue that it would further strengthen the e-commerce giant’s control over the smart home market.
However, British antitrust regulators have already approved Amazon’s acquisition of iRobot in June. The acquisition is currently under review by the Federal Trade Commission in the United States. On Monday, Amazon’s stock saw a modest increase of less than 1%.