Amazon and iRobot have jointly announced the termination of their proposed merger due to strong objections from antitrust regulators in the European Union and the United States.
Amazon indicated that securing regulatory approval in the European Union was insurmountable for its proposed $1.4 billion acquisition of iRobot.
Margrethe Vestager, the EU’s antitrust commissioner, revealed that Amazon’s acquisition of iRobot would have allowed Amazon to limit or impair iRobot’s competitors’ access to Amazon stores.
According to Vestager, Amazon could have taken actions such as delisting rival robot vacuum cleaners, reducing the visibility of rivals, or raising the costs of iRobot’s competitors to advertise and sell their robot vacuum cleaners on the Amazon marketplace.
iRobot revealed a substantial restructuring initiative aimed at cost reduction, involving a workforce reduction of approximately 31%, equivalent to 350 jobs.
Additionally, the company announced the departure of founder Colin Angle from the role of CEO at the helm of the Roomba robot vacuum manufacturer.
Earlier last month, European Commission antitrust regulators expressed concerns that Amazon’s acquisition of iRobot could allow it to unfairly compete with iRobot rivals on its online marketplace in France, Germany, Italy, and Spain.
Amazon announced its plans to expand its smart home devices and virtual healthcare services through the acquisition of several companies, including Alexa and Ring, in August 2022.
The accusations are that Amazon uses illegal strategies to increase profits on its online retail platform. One such strategy is an algorithm that allegedly raised prices by more than $1 billion. Critics criticised the deal for strengthening Amazon’s position in smart home devices.