The U.S. Federal Trade Commission has begun a review of the planned acquisition of iRobot Corp. by Amazon.com Inc. for $1.7 billion, the company behind the Roomba brand of robot vacuum cleaners, Politico reported Friday evening.
The deal, announced on August 5, would see Amazon acquire not only the Roomba range of robotic vacuum cleaners, but also educational robots used to teach programming skills, a range of handheld vacuum cleaners and air purifiers. The latter goes through Airis Cleantec AG, which iRobot bought last year.
The iRobot acquisition would enhance Amazon’s broader smart home portfolio, which includes products such as thermostats and doorbells. Amazon acquired Ring Inc., a maker of smart home devices in 2018.
The FTC’s review comes as no surprise. Such reviews are typical when a large company decides to acquire another large company, although the speed at which the investigation was launched is somewhat notable. The review will examine whether the deal violates antitrust law, with both companies bracing for a potentially long and arduous investigation.
The FTC is examining whether the deal will illegally increase Amazon’s market share in both the connected device market and the retail market, according to Politico. The review will also consider whether the data generated on Roomba vacuum users will give it an unfair advantage over other retailers.
By using Roomba, Amazon could, in theory at least, use detailed maps generated by vacuum cleaners to recommend products based on those maps. While using such data seems very Big Brother, it could be incorporated into Amazon’s broader suggestion algorithms.
News of the iRobot acquisition review comes after Amazon revealed on September 2 that it had received a request for additional information from the FTC about its planned $3.9 billion acquisition of 1Life. Healthcare Inc., a company that operates primary care clinics under the name One Medical.
As with the iRobot deal, a review of the 1Life Healthcare deal is pretty standard for the FTC, though there’s a complicating factor: FTC Chairman Lina Khan, who was appointed to the position in June 2021, is a long-time Amazon review.
Khan wrote an article in 2017 arguing that Amazon’s conglomerate structure should not have escaped previous antitrust security. She also highlighted in the article concerns about how Amazon could use user data to fight rivals, a concern now being raised with the acquisitions of iRobot and 1Life Healthcare.
There’s no suggestion that Khan won’t treat Amazon fairly. However, under his direction, the FTC will likely take a closer look at both agreements. In previous years, the FTC may not have reviewed transactions as closely because the commission had a more lax stance on acquisition review.