European Commission's review of the Amazon/iRobot merger

AMAZON / IROBOT

European Commission

Case M.10920

Status: Open

Background

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. From the moment a transaction is notified, the Commission carries out a preliminary investigation and generally has 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).

Our submission

We believe that the merger is likely to result in the strengthening of Amazon's dominant positions at the expense of consumer interests.

In June 2023, we made a submission to the European Commission, outlining our concerns, and asking to be recognised as an interested third party and be afforded the right to be heard. 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.

Phase I Review: concluded on 6 July 2023

On 6 July 2023, the European Commission concluded its Phase I review and decided to open an in-depth investigation to assess whether the deal will harm competition and consumers. In its announcement, the EU competition regulator underlined its concerns that Amazon could potentially use iRobot’s user data in potentially anti-competitive manners:

Amazon would obtain access to iRobot’s users’ data, including: (i) information provided by iRobot’s RVCs users; (ii) information collected by iRobot’s RVCs; and (iii) information collected by iRobot from third parties. This data may provide Amazon with an important advantage in the market for online marketplace services to third-party sellers (and related advertising services) and/or other data-related markets. For example, iRobot’s data may allow Amazon to better rank organic results and advertisements on its own marketplace and/or to better personalize and target the advertisements, making it more difficult for rival marketplace providers to match Amazon’s online marketplace services.

PI has, for a second time following our intervention in the Google/Fitbit merger, been afforded the right to be heard as an interested third party in the Commission’s formal review of the proposed merger and we will continue engaging with them to demand that no deal is approved without robust safeguards that uphold consumer well-being in the digital economy.