The UK’s competition regulator has cleared a deal for Amazon to acquire iRobot, the developer of the Roomba vacuum.
The deal, which was first announced in August 2022, initially came under investigation from the Competition and Markets Authority (CMA) over concerns that Amazon could disadvantage rival firms with the deal.
The CMA’s primary focus was whether Amazon could use its online store to unfairly promote Roomba vacuums over other options in the market, and if iRobot’s technology could be incorporated into Amazon’s smart home products, potentially harming competition for other smart home providers.
After investigating these concerns, the CMA concluded that the deal would not be harmful to competition in the robot vacuum market and the smart home market.
The regulator determined that iRobot’s market presence in the UK was modest and already faces significant rivals. It also found that the UK market for robotic vacuums as a whole was small and of limited strategic importance to Amazon.
Furthermore, the regulator concluded that iRobot’s technology would not provide a significant advantage to Amazon’s smart home product line.
“More people are choosing to use ‘smart’ tech in their homes – whether that’s listening to the radio through a smart speaker, answering the door using a video doorbell, or keeping floors clean with robot vacuum cleaners,” said Colin Raftery, senior director of mergers at the CMA.
“That’s why it’s important to ensure tech firms that already benefit from powerful positions aren’t able to use those positions to undermine competitors at the expense of UK consumers and businesses.
“Here, after a thorough investigation, we’re satisfied that the deal would have no impact on competition in the UK.”
The cleared deal follows the regulator blocking Microsoft’s bid to acquire gaming giant Activision Blizzard.
While the decision drew heavy criticism from businesses towards the CMA, the clearance today of the Amazon acquisition shows the regulator is still open to clearing deals involving tech giants.
“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,” Alex Haffner, competition partner at UK law firm Fladgate, told UKTN.
“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.
“As always, the CMA will have co-operated with the other international regulators reviewing the deal. The merging parties will no doubt take comfort from the CMA clearance although they will also know that the different regulatory agencies do not always operate in complete lock-step with one another.”