Amazon wants to acquire IRobot and its Roomba vacuum robots. An operation that raises questions about respect for competition and the implications for the privacy of the brand’s customers. A first step has been taken brilliantly with the endorsement given by the English competition watchdog, the CMA.
In August 2022, Amazon announced the acquisition of the American giant iRobot and its Roomba vacuum robots for 1.7 billion dollars. An operation which must still receive the approval of the main competition regulatory bodies. A first step has just been taken with the green light given this Friday by the British competition policeman, the CMA.
British green light
iRobot was born in 1990 under the leadership of robotics specialists from MIT (Massachusetts Institute of Technology). He is simply the inventor of robot vacuum cleaners and his products will complement the online retail giant’s connected home offering, which already includes Echo and Ring products. While the CMA caused a sensation by opposing the acquisition of Activision Blizzard by Microsoft in April, here it is much more conciliatory with Amazon.
Thus, “the CMA concluded that the agreement would not cause competition problems in the United Kingdom”, according to the press release of the English regulator which specifies three points:
- that “iRobot’s market position in the supply of robot vacuum cleaners in the UK is modest and it already faces several significant rivals» ;
- that “even if Amazon could use its position as a major retailer to disadvantage rival robot vacuum makers, there would be no incentive to do so. Indeed, the benefits of such a strategy would be limited… and pursuing this strategy would incur significant costs for Amazon.(including due to lost commission on sales and lower advertising revenue);
- so that “iRobot’s acquisition would not disadvantage Amazon’s rival “smart home” platforms. This is mainly due to the fact that robot vacuums (and the data they collect) are generally not seen as a significant addition to the emerging UK smart home market.and that the competition is strong.
An operation still on hold
If the British green light is a good sign, it is not enough for the purchase to be effective. Indeed, the United States Federal Trade Commission (FTC) has not yet given its approval and its chairman (Lina Khan) fears that this transaction could “harm consumers and reduce competition and innovation in the market. home robotics. Moreover, according to the Financial Times, the European Union is preparing an investigation into this acquisition.
Indeed, if for Amazon the purchase of iRobot gives it a new brick for its connected home ecosystem, it will above all take control of the patents and technologies of a company which has also worked for the American defense. A source of digital wealth that would allow Amazon to position itself as a leader in domestic robotics and beyond.
However, many questions remain unanswered. Thus, Europe fears that by combining the data collected by the Echo speakers, the Alexa assistant and the Ring monitoring products, added to the spatial information obtained by the Roomba vacuum cleaners, Amazon ends up knowing the homes of its customers too well. and infringe their privacy and the confidentiality of their data.
Amazon and iRobot have already been pinned on the subject. The former provided US police with footage from Ring products without a court warrant. The second leaked photos taken by Roomba J7s showing, among other things, a young woman on the toilet.
Amazon is preparing its defense and the two protagonists of the operation ensure that this type of incident will not happen again. In addition, iRobot separated from the service provider who had leaked photos. The adventure is not over yet and even if it makes less noise than the acquisition of Activision Blizzard at 69 billion dollars. The impact of the Amazon iRobot merger is likely to be much greater in our daily lives and everything related to the connected home. The EU is much more sensitive than the CMA to privacy issues, while the British regulator seems to have focused only on the competition aspect of the file. To be continued then.
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