Submissions to the UK and EU competition authorities on the Amazon/iRobot merger
On 2 May and 5 June 2023, PI made a submission to the UK Competition and Markets Authority (CMA) and the European Commission, respectively, in relation to the proposed merger between Amazon and iRobot, outlining the concerns the transaction raises for consumers and markets.
- In August 2022, Amazon announced that they had entered into a definitive merger agreement to acquire iRobot, a company specialising in consumer robots like the Roomba vacuum cleaners.
- The transaction was formally notified to the European Commission on 1 June 2023, while the UK competition regulator (CMA) has already launched an investigation since April 2023.
- PI carried out a legal and technical analysis of the data impacts of the merger, which strongly indicates that the latter would threaten competition in and across several potential markets.
- We asked the UK and EU regulators to apply close scrutiny to the transaction, warning about Amazon's potential use of iRobot’s data troves and the resulting degradation of consumers' privacy options.
In August 2022, Amazon announced that they had entered into a definitive merger agreement to acquire iRobot, a company that specialises in designing and building consumer robots. The transaction was formally notified to the European Commission on 1 June 2023, while the UK Competition and Markets Authority (CMA) has already launched an investigation into the transaction since April 2023.
We believe that this acquisition is likely to significantly impede effective competition in and across several markets, resulting in the strengthening of Amazon's dominant positions at the expense of consumer interests. This is why we made submissions before both regulators, warning them about Amazon's potential use of iRobot’s data troves and asking them to apply close scrutiny!
Concerns we put forward to the CMA and the European Commission
In our submission, we note that, whilst the starting point for the competitive assessment is the state of static competition in the relevant markets, the Proposed Acquisition, much like the Meta/GIPHY Merger, requires a broader analysis of potential and dynamic competition which arise where businesses engage in a fluid competitive process which revolves around innovation across more than one, connected market.
With that in mind, we conducted a legal and technical analysis of the data impacts of the transaction, indicating that it would threaten competition in and across several potential markets including, without limitation:
- the market for smart home devices;
- the market for online retail, including intermediation services; and
- the market for digital advertising services.
More generally, we believe that acquisition of iRobot by Amazon would reduce what little pressure there currently is on Amazon to compete in relation to privacy options available to consumers, leading to even less competition on privacy standards and thereby enabling the further degradation of consumers’ privacy protections.
These parallel investigations by the CMA and the European Commission (the deal is also being investigated by the FTC in the United States) highlight that the merger is of international concern.
In our submission to the European Commission, we have also asked to be afforded the right to be heard as an interested third person in the Commission’s formal review. If granted, this would allow us to make further submissions as the review progresses just like we did with Google's acquisition of Fitbit. In the meantime, a CMA Phase I decision is expected by mid-June 2023.
We are happy to be working with Hausfeld & Co LLP, who are representing and providing support to PI with regard to this merger case.