“Our in-depth investigation preliminarily showed that the acquisition of iRobot would have enabled Amazon to foreclose iRobot’s rivals by restricting or degrading access to the Amazon Stores,” Margrethe Vestager, the commission’s competition chief, said on Monday.
The investigation raised fears that Amazon would have been able to “delist or not list rival robot vacuum cleaners”, reduce their visibility on its marketplace, limit access to “commercially attractive product labels” like Amazon’s Choice, or make it costlier for iRobot’s rivals to advertise and sell their products, she said in a statement.
It would have been “economically profitable” for Amazon to shut out rivals, limiting competition and leading to higher prices, lower quality and less innovation, she said.
British antitrust regulators cleared Amazon’s purchase in June, but it still faced scrutiny in the US by the Federal Trade Commission, which filed a landmark antitrust lawsuit against the online retail giant last year.
David Zapolsky, Amazon’s general counsel, lashed out at regulators and said consumers would lose out on “faster innovation and more competitive prices”.
“Mergers and acquisitions like this help companies like iRobot better compete in the global marketplace, particularly against companies, and from countries, that aren’t subject to the same regulatory requirements in fast-moving technology segments like robotics,” he said.
He added that “undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition— the very things that regulators say they’re trying to protect”.
Now that the deal has been called off, iRobot said it would undergo a restructuring plan designed to stabilise the company. As part of those changes, the company will lay off roughly 350 employees.
iRobot chairman and CEO Colin Angle also will step down. Glen Weinstein, the company’s executive vice-president and chief legal officer, will serve as interim CEO.
Consumer rights groups had voiced concerns about the Amazon-iRobot deal, saying it would broaden the ecommerce giant’s dominance in the smart home market.
Amazon has purchased other smart home companies in the past, including home security camera maker Blink, doorbell camera maker Ring and the mesh-networking Wi-Fi company Eero.
This is the latest example of a deal involving US companies that fell apart after facing scrutiny from European regulators.
Last year, Adobe abandoned its plan to buy online design company Figma for US$20b because of EU and British antitrust concerns. Biotech giant Illumina was forced to undo its US$7.1b purchase of cancer-screening company Grail after losing legal battles with antitrust enforcers in both Europe and the U.S.
