EC sends Objections to Amazon over Acquisition of iRobot

The European Commission has informed Amazon of its preliminary view that its proposed acquisition of iRobot may restrict competition in the market for robot vacuum cleaners (‘RVCs'). On 6 July 2023, the EC opened an in-depth investigation to assess if Amazon's acquisition of iRobot may restrict competition in the market for the manufacturing and supply of RVCs, and allow Amazon to strengthen its position in the market for online marketplace services to third-party sellers (and related advertising services) and/or other data-related markets.

As a result of this in-depth investigation, the Commission is concerned that Amazon may restrict competition in the European Economic Area (‘EEA')-wide and/or national markets for RVCs, by hampering rival RVC suppliers' ability to effectively compete. In particular, the Commission found that Amazon may have the ability and the incentive to foreclose iRobot's rivals by engaging in several foreclosing strategies aimed at preventing rivals from selling RVCs on Amazon's online marketplace and/or at degrading their access to it. This may include delisting rival RVCs, reducing the visibility of rival RVCs in both non-paid and paid results displayed in Amazon's marketplace, limiting access to certain widgets or certain commercially attractive product labels, and/or directly or indirectly raising the costs of iRobot's rivals to advertise and sell their RVCs on Amazon's marketplace.

The EC also found that Amazon may have the incentive to foreclose iRobot's rivals because it may be economically profitable to do so. The merged entity would likely gain more from additional sales of iRobot RVCs than it would lose from fewer sales of iRobot's rivals and other related products on Amazon. Such gains include benefits from additional data gathered from iRobot's users. Such foreclosure strategies could restrict competition in the market for RVCs, leading to higher prices, lower quality, and less innovation for consumers.