Statement by Executive Vice-President Vestager on announcement by Amazon and iRobot to abandon their transaction

This article is brought to you in association with the European Commission.

The Commission takes note of Amazon’s and iRobot’s decision to terminate their agreement according to which Amazon intended to acquire sole control over iRobot.The abandonment follows the findings of the Commission’s in-depth investigation and the sending of a Statement of Objections on 27 November 2023.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said:

‘iRobot manufactures robot vacuum cleaners. Its flagship brand is the well-known ‘Roomba’. iRobot is one of the main robot vacuum cleaners suppliers in the European Economic Area (‘EEA’) and notably in several Member States. Amazon is both a retailer and an online marketplace operating local marketplaces in several Member States – the Amazon Stores.  Amazon Stores are the main sales and discovery channel for robot vacuum cleaners customers in the EEA, and in particular in France, Germany, Italy and Spain.

Robot vacuum cleaners are part of the ‘smart home’ revolution seeking to digitalise our homes and to make domestic life easier. Amazon already has some “smart home” devices such as the voice assistant Alexa or the smart doorbell Ring, and in 2022 it wanted to buy iRobot for approximately €1.56 billion.

We looked closely at the dual role of Amazon as platform operator and market participant, and the implications of Amazon merging with the owner of a very successful product for which Amazon is already an important sales channel. During our investigation, we have been in close contact with the US Federal Trade Commission.

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. For example, Amazon would have been in a position to (i) delist or not list rival robot vacuum cleaners; (ii) reduce visibility of rival robot vacuum cleaners displayed in Amazon’s marketplace; (iii) limit access to certain widgets or certain commercially attractive product labels; or (iv) raise the costs of iRobot’s rivals to advertise and sell their robot vacuum cleaners on Amazon’s marketplace. We also preliminarily found that Amazon would have had the incentive to foreclose iRobot’s rivals because it would have been economically profitable to do so. All such foreclosure strategies could have restricted competition in the market for robot vacuum cleaners, leading to higher prices, lower quality, and less innovation for consumers.

Finally, when assessing transactions of this kind, it is key to take into account what the transaction would mean for rivals and customers of the merged entity. This applies in particular to transactions by which large, established sales channels acquire suppliers that are heavily dependent on the acquirer’s infrastructure and customer reach to be successful in the EEA market.