Amazon’s $1.7 billion acquisition of Roomba-maker iRobot, as cleared by the UK Competition and Markets Authority (CMA):
The CMA opened an investigation into the proposed acquisition in January 2023, after receiving concerns from rival companies about the potential impact on competition in the UK market for robotic vacuum cleaners and floor care robots.
In its investigation, the CMA found that Amazon and iRobot were not direct competitors in the UK market for robotic vacuum cleaners and floor care robots. Amazon does not sell robotic vacuum cleaners or floor care robots under its own brand, and iRobot does not sell its products through Amazon’s retail platform.
However, the CMA did find that Amazon and iRobot were indirect competitors in the UK market for smart home devices. Amazon is a leading provider of smart home devices, such as Echo speakers and Fire TV devices, while iRobot is a leading provider of robotic vacuum cleaners and floor care robots, which can be controlled using smart home devices.
The CMA found that the proposed acquisition could reduce competition in the UK market for smart home devices by giving Amazon access to iRobot’s customer data and technology. This could give Amazon an advantage in developing and marketing its own smart home devices, and could make it more difficult for other companies to compete in this market.
However, the CMA also found that the proposed acquisition could lead to benefits for consumers, such as lower prices and better innovation. Amazon could use iRobot’s technology to improve its own robotic vacuum cleaners and floor care robots, and could also use iRobot’s customer data to develop new smart home products and services.
Ultimately, the CMA decided to clear the proposed acquisition, but imposed a number of conditions on Amazon to address its competition concerns. These conditions include:
Amazon must not use iRobot’s customer data to compete with other smart home device companies.
Amazon must not use iRobot’s technology to develop its own robotic vacuum cleaners or floor care robots for at least five years.
Amazon must allow other companies to access iRobot’s technology and customer data on fair and reasonable terms.
The CMA’s decision to clear the proposed acquisition is a significant development for Amazon and iRobot. It will allow Amazon to enter the market for robotic vacuum cleaners and floor care robots, and could give the company a significant advantage in this market. However, the CMA’s conditions will limit Amazon’s ability to use iRobot’s technology and customer data to compete with other companies in the smart home market.
