The EU’s competition watchdog is going to stop Amazon from buying vacuum cleaning company iRobot.
The tech company was given approval to buy by the UK government’s competition body, so this is unfortunate news for them.
The Competition and Markets Authority, or CMA, stated that it held a “modest” position in the marketplace in the United Kingdom and that it already had a lot of big challengers.
Amazon did not say anything.
The largest business moved to buy iRobot, the manufacturer of the Roomba vacuum cleaner, in August 2022. The deal was worth $1.7bn (£1.4bn).
If it wanted to grow in the marketplace for products for smart homes, it did so.
Halting Amazon’s Acquisition of iRobot Raises Concerns Over Home Robotics Competition
The government worries that iRobot’s collaboration with Amazon could make it harder for other vacuum firms to compete, especially if Amazon decides to offer greater discounts on the Roomba on its online store.
In July of last year, the European Commission (EC), which is in charge of competition in the EU, began looking into the deal.
The EC has until February 14 to make a decision, but before a final decision can be made, all 27 of its top political leaders will have to agree that the proposal should be turned down.
After hours trading, iRobot shares dropped 40% after the Wall Street Journal was the first to report on the EU’s plans.
For the company, the Amazon takeover was seen as a good thing because sales have been going down.
“It doesn’t make sense if the goal is to have more competition in the home robotics market,” said Matt Schruer, head of the Computer and Communications Industry Association, a tech lobbying group.
“Blocking this deal may well leave consumers with fewer options, and regulators cannot sweep that fact under the rug,” Schruer told Reuters.
Some types of Roomba cost around £1648 in the UK.
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