UK’s Competition and Markets Authority (CMA) has given a go-ahead to the deal noting that Amazon is not violating any competition concerns.
Earlier today on Friday, June 16, Britain’s competition regulator gave a go-ahead to Amazon for its planned acquisition of the Roomba vacuum cleaner maker – iRobot Corporation.
UK’s Competition and Markets Authority (CMA) said that they have cleared the deal which would not lead to any competition concerns in the country. Earlier in April 2023, the CMA started investigating the deal that Amazon.com Inc (NASDAQ: AMZN) made in August of the previous year. Amazon wanted to add more smart-home devices to its collection, like the Alexa voice assistant, smart thermostats, security devices, smart displays for walls, and a robot named Astro that looks like a dog. The CMA had considered three potential areas of concern.
- The first is whether Amazon might start selling robot vacuum cleaners if the merger doesn’t happen, and if this would significantly reduce competition.
- The second is whether Amazon could use its online store to give iRobot’s competitors a disadvantage if the merger goes through.
- The third is whether iRobot vacuum cleaners are important for “smart home” platforms, and if Amazon could give its smart home competitors a disadvantage if the merger happens.
Speaking on the development, a spokesperson for Amazon said:
“We’re pleased with the UK Competition and Markets Authority’s decision and are committed to supporting regulatory bodies in their work. We look forward to similar decisions from other regulators soon.”
CMA-Amazon Deal Has No Competition Concerns
After doing the due diligence, CMA concluded that Amazon’s deal of acquiring iRobot won’t violate any competition concerns that the regulator had. The CMA found that iRobot doesn’t have a big market share in the UK for robot vacuum cleaners and already faces significant competition. Therefore, Amazon’s entry wouldn’t greatly affect the market.
Even though Amazon is a major retailer, it wouldn’t have a strong incentive to disadvantage other robot vacuum cleaner manufacturers. The UK market for these cleaners is small and not expected to grow much, so the benefits would be limited. Additionally, pursuing such a strategy would be costly for Amazon.
The acquisition of iRobot wouldn’t harm Amazon’s competitors in the “smart home” market. Robot vacuum cleaners and the data they collect are not considered crucial for the UK smart home market. There are also other vacuum cleaners with similar capabilities that can be part of rival “smart home” offerings.
Colin Raftery, Senior Director of Mergers at the CMA, said:
“It marks a significant milestone, and both companies are continuing to work cooperatively with other relevant regulators in their review of the merger.”
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.