Reuters has reported that the online retailer refused to provide remedies to address competition concerns raised by the European Commission (EC).
The EC, which has until 14 February 2024 to decide on the proposed transaction, has expressed concerns that the deal could limit competition in the robot vacuum cleaner market.
Amazon chose not to offer concessions by a 10 January 2024 deadline to alleviate the commission’s concerns.
The commission’s main worry is that Amazon could hinder iRobot’s rivals on its online marketplace, particularly in France, Germany, Italy and Spain.
Although the Digital Markets Act could address these issues, the commission may prefer to block the deal due to the act’s lengthy enforcement process. The new rules have not yet been legally challenged or tested.
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Computer and communications industry association president Matt Schruers criticised the potential block, stating: “Blocking this deal may well leave consumers with fewer options, and regulators cannot sweep that fact under the rug.”
iRobot shares dropped more than 30% in early trading in response to the EC’s plans.
Amazon agreed to buy iRobot in August 2022 to enhance its portfolio of smart devices such as the Alexa voice assistant.
The UK’s market regulator, the Competition and Markets Authority, approved the proposed deal in June 2023.