So much for Biden being a President for the working man. In a concerning turn of events, Amazon’s proposed acquisition of iRobot, the manufacturer of the iconic Roomba vacuum cleaners, has been abandoned because of the regulatory roadblocks imposed by both the European Union and the U.S. Federal Trade Commission (FTC).
The unfortunate end result of this regulatory blockade is 31% of iRobot’s workers being laid off, and we can expect to find companies like iRobot unable to provide more and lower cost products to consumers. Not only is this bad for American workers, consumers and businesses, but this approach fails to both recognize the law and that competition in places like retail and smart home technologies are fierce.
Really, regulatory opposition to this merger appears to be more about hindering large corporations in disfavor with the government than protecting competition. The contention that this acquisition would harm competition doesn’t match reality.
Walmart, almost twice the size of Amazon, continues to dominate the retail space, and the constant proliferation of retailing options, both on and offline, affords consumers unprecedented choice. In the realm of robot vacuum cleaners, diverse companies like Eufy and Roborock offer competitive products. The New York Times identified them both as best robot-vacuums – not iRobot.
The EU and FTC’s “statement of objections” suggested that Amazon might restrict or degrade access to rival robot vacuum cleaners on its platform post-acquisition. But this fantasy does not align with Amazon’s business model or broader market dynamics. Amazon, as a retailer and marketplace, thrives on offering a wide variety of products, including competing smart home devices. Its success is built on consumer choice and convenience, not exclusionary practices, like the government endorses.
The assertion that Amazon would engage in anti-competitive behavior overlooks the nature and incentives of online marketplaces. They are designed to cater to a broad range of consumer preferences, and limiting variety or accessibility would be contrary to their business interests and their ability to retain customers.
The FTC’s alignment with the EU’s stance, seemingly motivated by an anti-business agenda under Chair Lina Khan, raises serious concerns. By obstructing this acquisition, EU regulators are quite literally stopping competition. The technological and business innovations that could have emerged from this merger are now lost.
And this isn’t the first time these shady tactics have been weaponized against American businesses. American chip maker Nvidia was forced to abandon its deal to buy Arm due to “significant regulatory challenges.” American company Meta was forced to abandon its acquisition of meme maker Giphy following aggressive UK antitrust bureaucratic red tape. Microsoft barely accomplished its Activision-Blizzard acquisition and only after making incredible concessions to the UK and EU authorities. Last year, American business Adobe was forced to abandon its deal to buy online collaboration company Figma due to pressure from UK and EU antitrust bureaucrats. And now we can unfortunately add Amazon and iRobot to the list of American victims of regulatory attacks on growth and innovation.
Tragically, the real casualties of this regulatory overreach are workers. With the collapse of the deal, iRobot must lay off 31% of its workforce. These job losses are a direct consequence of faulty regulatory theories that prioritize hypothetical concerns over the tangible benefits of business growth and innovation.
This regulatory blockage of a rational merger is a stark reminder of the dangers of overzealous policymaking. By threatening to block the Amazon-iRobot acquisition, the EU, aided by the FTC, has cost workers jobs and consumers innovation.
The pursuit of an anti-consumer agenda under the guise of protecting competition serves no one. It’s time for regulators to reevaluate their priorities and focus on enabling innovation and growth, rather than hindering it with unnecessary red tape and intimidation tactics.