UK antitrust regulators cleared Amazon’s purchase of robot vacuum maker iRobot on Friday, but the $1.7 billion deal still faces scrutiny in the United States and Europe. The Competition and Markets Authority said it decided not to escalate its initial investigation because it concluded that the deal would not result in a “substantial lessening of competition” within the United Kingdom.
Founded out of the Massachusetts Institute of Technology (MIT) some three decades ago, iRobot is best known for its Roomba-branded autonomous vacuum cleaners, though it has expanded into related products including those capable of mopping floors. For Amazon, which has been seeking deeper inroads into the smart home in addition to its own dabblings in home robotics, it wasn’t a major surprise that iRobot did fall on its radar.
Consumer groups have voiced concerns that Amazon’s purchase of Bedford, Massachusetts-based iRobot, which makes the popular Roomba robotic vacuum cleaners, would widen the e-commerce giant’s dominance in the smart home market.
The acquisition is still facing a review in the U.S. by the Federal Trade Commission amid worries about Amazon’s growing market power. It’s also under scrutiny by the European Union’s executive arm, which opened a review of the deal this month.
The U.K. watchdog said in its decision that robot vacuum cleaners and the data they collect aren’t generally considered an important gateway to the emerging market for smart home devices. It said iRobot has a modest U.K. market position, already faces “several significant rivals” and Amazon would have little incentive to give its products special treatment over rivals in its online store.
If nothing else, the U.K.’s decision today may go some way toward addressing criticism leveled at the Competition and Markets Authority (CMA) in recent months over the way it’s blocking merger and acquisition (M&A) activity, particularly involving U.S. companies.
The clearance decision is a useful riposte to allegations, which have taken on particular prominence recently in the light of Microsoft/Activision acquisition, that the CMA is anti-tech or unduly stifling economic growth in the sector. In reality though, the ‘fundamentals’ of this deal means that the CMA’s assessment was far less controversial than in other tech-based cases given in particular iRobot’s low market-share.
Alex Haffner, Competition Partner, Fladgate
