Amazon’s purchase of Roomba maker cleared by CMA
The CMA has cleared the online retailer’s $1.7 billion purchase of iRobot
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Online retailer Amazon.com Inc. (Amazon) announced its proposed purchase of iRobot Corporation (iRobot) in August 2022. iRobot designs and builds consumer robots, including robot vacuum cleaners sold under the ‘Roomba’ brand.
The Competition and Markets Authority (CMA) considered three areas of potential concern:
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whether Amazon could enter to compete as a supplier of robot vacuum cleaners if the merger did not go ahead, and whether this loss of potential competition, as a result of the merger, would be substantial.
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whether Amazon could use its online store, which currently accounts for the majority of sales of robot vacuum cleaners in the UK, to disadvantage iRobot’s rivals following the merger.
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whether iRobot vacuum cleaners could be an important input for “smart home” platforms, and whether Amazon could disadvantage its smart home rivals following the merger as a result.
The CMA has now concluded that the deal would not lead to competition concerns in the UK. In particular the CMA found:
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that iRobot’s market position in the supply of robot vacuum cleaners in the UK is modest and that it already faces several significant rivals. On this basis, the CMA considered that the loss of potential competition from Amazon wouldn’t have a substantial impact on market outcomes.
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that while Amazon could use its position as a major retailer to disadvantage rival robot vacuum cleaner manufacturers, it would lack the incentive to do so. This is because the benefits of such a strategy would be limited, given that the UK market for robot vacuum cleaners is small (and not expected to grow significantly in the future) and of limited strategic importance, and pursuing this strategy would have significant costs for Amazon (including from lost sales commission and reduced advertising revenues).
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the acquisition of iRobot would not disadvantage Amazon’s rival ‘smart home’ platforms. This is primarily because robot vacuum cleaners (and the data that they gather) are generally not considered to be an important input to the emerging “smart home” market in the UK. The CMA also found that there are, in any case, several alternative robot vacuum cleaners with similar capabilities to iRobot that could form part of rival “smart home” offerings.
Colin Raftery, Senior Director of Mergers at the CMA, said:
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.
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.
More information can be found on the CMA’s Amazon / iRobot case page.
Notes to editors:
- While the deal has been cleared in the UK by the CMA today (Friday 16 June), it remains under regulatory review in other jurisdictions.
- The CMA launched an initial phase 1 investigation in April 2023 conducting a wide-ranging investigation, gathering data and internal documents from the merging businesses to understand how they compete and how they might evolve their offerings in future. The CMA also gathered evidence from other market participants, such as rival suppliers of robot vacuum cleaners, UK retailers, and ‘smart home’ platforms.
- The CMA’s decision to clear the Amazon / iRobot merger is separate to its ongoing CA98 investigation into Amazon Marketplace.
- For media enquiries contact the CMA press office on 0203 738 6460 or press@cma.gov.uk