Amazon is not moving forward with its decision to buy robot vacuum maker iRobot, pointing out “undue and disproportionate regulatory hurdles,” from the objection that the European Union has posed towards the $1.4billion deal, originally proposed in 2022,
The two companies have expressed their disappointment as they mutually agreed to terminate the acquisition deal. The deal has faced reportedly, antitrust scrutiny on both sides of the Atlantic. Although Amazon’s purchase was cleared in June by the British antitrust regulators, the Federal Trade Commission in the U.S, posed scrutiny filing a landmark antitrust lawsuit against the giant online retail store, last year.
The executive body of the EU, which is the European Commission, during a probe in July, had expressed its skepticism regarding the proposed deal, worrying that it could result in Amazon preventing the rivals of iRobot from competing on Amazon’s online marketplace, with the possibility of Amazon delisting or reducing the prominence that the products of rivals hold in search results and/or elsewhere.
In a report by CNBC, Margrethe Vestage, the executive vice president of the European Commission said that Amazon’s marketplace control “could have restricted competition in the market for robot vacuum cleaners, leading to higher prices, lower quality, and less innovation for consumers.”
Amazon’s general counsel, David Zapolsky, lashed out at regulators saying that consumers would miss out on “faster innovation and more competitive prices.” He further added on how mergers and acquisitions help make companies like iRobot more competitive in the global marketplace, especially against companies and from countries that are not subjected to the “same regulatory requirements in fast-moving technology segments like robotics.”
iRobot is focusing on its margin improvements, expenditure reduction research and development, and pause work on “non-floorcare” products, including its air purifiers and robotic lawn mowers. It is also setting off to undergo a restructuring plan, that includes laying off as much as 350 employees. Colin Angle, CEO and Chairman of iRobot, will also step down, but be present as a senior adviser. Glen Weinstein,the company’s executive vice president and chief legal officer will be the interim CEO.
Amazon will be paying a $94 million breakup fee to iRobot, the robot maker that has a market capitalization of under $400 million, after the news of the deal being withdrawn.
