The UK’s Competition and Markets Authority (CMA) has given the green light to the deal, noting that Amazon does not breach any competition concerns.
Earlier in the day on Friday June 16, the British competition regulator gave the green light to Amazon for its proposed acquisition of vacuum cleaner manufacturer Roomba – iRobot Corporation.
The UK’s Competition and Markets Authority (CMA) said it had cleared the deal, which would raise no competition concerns in the country. Earlier in April 2023, the CMA began investigating the deal struck by Amazon.com Inc (NASDAQ: AMZN) in August of the previous year. Amazon wanted to add more smart home devices to its collection, like voice assistant Alexa, smart thermostats, security devices, smart wall displays and a robot named Astro that looks like a dog. The CMA had considered three potential areas of concern.
- The first is whether Amazon could start selling robot vacuums if the merger doesn’t happen, and whether that would significantly reduce competition.
- The second is whether Amazon could use its online store to disadvantage iRobot’s competitors in the event of a merger.
- The third is whether iRobot vacuums are important for “smart home” platforms and whether Amazon could put its smart home competitors at a disadvantage if the merger occurs.
Speaking on the development, an Amazon spokesperson said:
“We are pleased with the UK Competition and Markets Authority’s decision and are committed to supporting regulators in their work. We look forward to similar decisions from other regulators soon.
The CMA-Amazon deal has no competition concerns
After conducting due diligence, CMA concluded that Amazon’s agreement to acquire iRobot would not violate any competition concerns the regulator had. The CMA found that iRobot does not have a large market share in the UK for robot vacuum cleaners and already faces significant competition. Therefore, Amazon’s entry would not affect the market much.
Even though Amazon is a big retailer, it wouldn’t have a strong incentive to disadvantage other robot vacuum makers. The UK market for these cleaners is small and not expected to grow much, so the benefits would be limited. Moreover, pursuing such a strategy would be costly for Amazon.
The acquisition of iRobot would not harm Amazon’s competitors in the “smart home” market. Robot vacuums and the data they collect are not seen as crucial to the UK smart home market. There are also other vacuum cleaners with similar capabilities that may be part of competing “smart home” offerings.
Colin Raftery, Senior Director of Mergers at CMA, said:
“This marks an important milestone, and the two companies continue to work cooperatively with other relevant regulators in their review of the merger.”
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Bhushan is a FinTech enthusiast and has a good flair for understanding financial markets. His interest in economics and finance draws his attention to the new emerging markets of Blockchain technology and cryptocurrency. He is continually in a learning process and motivates himself by sharing his acquired knowledge. In his spare time, he reads thrillers and occasionally explores his cooking skills.