Both companies declared that they came to a mutual decision to end their previously announced acquisition agreement. A termination fee will be paid by Amazon to iRobot.
The agreement was a component of Amazon’s significant entry into the smart home robotics market, which was first revealed in August 2022. It would have put the online retailer, which produces Ring home security cameras and Echo smart speakers, in direct competition with iRobot, a manufacturer of robot vacuums, and its Roomba line of products. However, EU and US antitrust authorities closely examined the companies’ plans out of concern that the merged business would unjustly prevent other producers of smart home devices from having their goods sold on Amazon’s website and marketplace.
Amazon and the iRobot board were advised to reevaluate the acquisition by European Union competition chief Margrethe Vestager. If authorized, her initial research suggested that it would have “anti-competitive effects.” She voiced worries that the combination might result in less innovative products in the industry, worse quality products, or higher prices. Being the proprietor of both brands, she was also concerned that the business would restrict or remove competing robot vacuums from its website, lessen their exposure, or raise the cost of advertising for rivals on the platform.
Though they haven’t made a decision yet, Vestager and the other EU antitrust authorities who have looked into the deal appear ready to obstruct it. The two companies are subject to severe financial penalties, which include hundreds of job losses and a $94 million termination fee for iRobot.