The European Union (EU) antitrust regulators have opened an official investigation into Amazon's proposal to acquire iRobot for $1.7 billion. It is the same company behind the popular Roomba lineup, producing robot vacuum cleaners.
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SEATTLE, WA - MAY 20: A sign is seen outside of an Amazon Go store at the Amazon.com Inc. headquarters on May 20, 2021 in Seattle, Washington. Five women employees sued Amazon this week, alleging discrimination and retaliation.
Amazon Is Facing Probe From EU
The regulators believed that acquiring the robot vacuum cleaner maker iRobot may reduce competition and strengthen the position of Amazon as an online marketplace provider.
Thus, a full-scale investigation was launched by the European Commission that will decide whether to block or clear the deal by November 15, Reuters reported.
The positive outcome of the deal would be concerning as it would allow Amazon to restrict competition in the market for robot vacuum cleaners.
As part of the investigation, the Commission has closely cooperated with other competition authorities during the initial probe and will reportedly continue such cooperation. There will be an in-depth investigation, and the opening of an in-depth inquiry will not prejudge the probe's outcome, according to EU.
The EU will also look at how getting access to iRobot users' data may give Amazon an advantage from online marketplace services to third-party sellers and other data-related markets in the industry.
"We continue to work through the process with the European Commission and are focused on addressing its questions and any identified concerns at this stage," Amazon spokesperson Alexandra Miller said in a statement.
Through this acquisition, the spokesperson told Reuters that Amazon could offer companies like iRobot the resources to accelerate innovation and invest in critical features while lowering consumer prices.
Also Read: Roomba Maker iRobot is Axing Roughly 85 Employees in Latest Layoff
Amazon Acquiring iRobot
In August last year, Amazon announced its efforts to purchase iRobot. Once successful, The Verge reported that this would make iRobot the latest addition to the company's acquired firms like Ring, Blink, and Eero.
After plans for the acquisition were announced, Amazon's hardware chief Dave Limp said he was excited to work with the iRobot team to invent ways that will make customers' lives easier and more enjoyable.
Amazon has developed one of the smart home's major ecosystems - the Alexa voice assistant. Following the deal's announcement, commentators cited iRobot's ambitions to use Roomba's sensor mapping to better understand its customers' homes and habits.
Amazon has already received approval from one important competition regulator, the UK's Competition and Markets Authority (CMA), which noted that the agreement would not lead to competition concerns in the UK given that the iRobot has several rivals in the space and UK market is small for robot vacuum cleaners.
To some companies, obtaining the CMA's approval is already significant. The regulator has previously opposed the acquisition of Activision Blizzard by Microsoft and forced Meta to unwind its Giphy acquisition.
This investigation of the EU on Amazon came at a time when big tech companies were heavily scrutinized by regulators for acquisitions and deals.
Related Article: UK Antitrust Regulator Approves Amazon's iRobot Acquisition
