Amazon’s iRobot Roomba acquisition under formal EU investigation

European Union regulators have opened an official investigation into Amazon’s proposed $1.7 billion acquisition of iRobot, the company behind the popular Roomba lineup of robot vacuum cleaners.

In a press release, the European Commission said it’s concerned that “the transaction would allow Amazon to restrict competition in the market for robot vacuum cleaners (‘RVCs’) and to strengthen its position as online marketplace provider.” The European Commission is also looking at how getting access to iRobot users’ data may give Amazon an advantage “in the market for online marketplace services to third-party sellers (and related advertising services) and / or other data-related markets.”

“We continue to work through the process with the European Commission and are focused on addressing its questions and any identified concerns at this stage,” Amazon spokesperson Alexandra Miller said in a statement. “iRobot, which faces intense competition from other vacuum cleaner suppliers, offers practical and inventive products. We believe Amazon can offer a company like iRobot the resources to accelerate innovation and invest in critical features while lowering prices for consumers.”

The European Commission will make a decision about if it will block the deal by November 15th.

Amazon announced its intention to purchase iRobot in August last year. If successful, iRobot would be just the latest in a string of smart home companies acquired by the e-commerce giant that also includes Ring, Blink, and Eero. “I’m excited to work with the iRobot team to invent in ways that make customers’ lives easier and more enjoyable,” Amazon’s Dave Limp said when plans for the acquisition were announced. Amazon also develops the Alexa voice assistant, which represents one of the smart home’s major ecosystems. Following the announcement of the deal, commentators were quick to point out iRobot’s historical ambitions to use Roomba’s sensor mapping to gain a deeper understanding of its customers’ homes and habits.

Amazon’s acquisition of iRobot has already been given the green light by one significant competition regulator, the UK’s Competition and Markets Authority (CMA). The CMA concluded that the deal will not lead to competition concerns in the UK, given iRobot has “several significant rivals” in the space and that “the UK market for robot vacuum cleaners is small (and not expected to grow significantly in the future).” Getting the CMA’s approval is significant, given the regulator has previously opposed Microsoft’s acquisition of Activision Blizzard and forced Meta to unwind its Giphy acquisition.

The EU’s investigation comes in an era of greater regulatory scrutiny of Big Tech acquisitions. A decade ago, Meta (then known as Facebook) was able to snap up Instagram and WhatsApp with relatively little oversight, but nowadays, even relatively modest acquisitions are attracting intense scrutiny. As well as being forced to sell Giphy, Meta also had a fight on its hands to acquire VR startup Within (though it eventually succeeded).

Amazon’s proposed purchase of iRobot is also being probed by the US’s Federal Trade Commission (FTC). Last year, The Wall Street Journal reported that the FTC had requested that both companies supply documents with supporting information about the deal. A group of Democrat lawmakers also called for the FTC to open a formal investigation. The Financial Times previously noted that such an investigation is likely to focus more on competition rather than privacy concerns.