Amazon's acquisition of iRobot has been called off due to regulatory hurdles. The European Union's investigation revealed that the deal could have led to restricted competition in the robot vacuum cleaner market. Amazon expressed disappointment, believing that the acquisition would have brought innovation and competitive prices to consumers.
In August 2022,
Amazon
announced that it will acquire
iRobot
, a company known for making robot vacuums. Now, both companies have revealed that the deal has been called off. Amazon said that one of the key reasons was the expected regulatory hurdles. The
European Union
had launched an investigation in the deal.
According to a report by CNBC,
Margrethe Vestager
, the European Commission’s executive vice president, said “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,” The EU’s argument was that the deal could have restricted competition in the “market for robot vacuum cleaners, leading to higher prices, lower quality, and less innovation for consumers.”
Disappointments expressed by Amazon, iRobot
"We're disappointed that Amazon's acquisition of iRobot could not proceed," said
David Zapolsky
, Amazon SVP and General Counsel. "We're believers in the future of consumer robotics in the home and have always been fans of iRobot's products, which delight consumers and solve problems in ways that improve their lives,” added Zapolsky.
“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,” he added.
"iRobot is an innovation pioneer with a clear vision to make consumer robots a reality," said Colin Angle, Founder of iRobot. "The termination of the agreement with Amazon is disappointing, but iRobot now turns toward the future with a focus and commitment to continue building thoughtful robots and intelligent home innovations that make life better, and that our customers around the world love,” added Angle.
Zapolsky also said that the two companies were excited to make the deal work and “this outcome will deny consumers faster innovation and more competitive prices, which we're confident would have made their lives easier and more enjoyable.
The companies have signed a termination agreement that resolves all outstanding matters from the transaction, including Amazon paying iRobot the previously agreed upon termination fee.
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