(NationalUSNews.com) — On Monday, January 29, online retailer and robot vacuum company iRobot released a joint statement announcing the dissolution of their 2022 acquisition agreement. Signed on August 4 of that year, Amazon was to purchase iRobot for an estimated $1.7 billion. Amazon would pay iRobot $94 million, which was agreed upon by the two companies, if the promised acquisition is terminated for any reason. Colin Angle, iRobot’s CEO, will be stepping down, and the company will be laying off 31% of their staff, which will be about 350 employees.
However, they were first slowed down by the Federal Trade Commission (FTC), which was concerned that Amazon would use the acquisition to further entrench their growing monopoly on the online marketplace. Further, they postulated that Amazon could sell the iRobot vacuums at a loss or with special discounts for Prime members, which could drive other robot vacuum manufacturers out of the market. They also expressed concern that Amazon might gain access to more personal data about their customers, such as details about their lifestyle and their home’s layout.
Now, they have come up against the immovable wall that is the European Commission, whose purpose is to propose new laws and regulations for the European Union (EU) as well as implement and monitor said laws. Their preliminary findings on the proposed acquisition were that it would be harmful to competition in the robot vacuum market. The commission has also recently announced they will be investigating AI partnerships and investments at several different companies, which would include Amazon.
Amazon is not the only company that has been thwarted by what David Zapolsky, Amazon’s general counsel, calls “undue and disproportionate regulatory hurdles” that prevent acquisitions that he says are a way to success for many companies. He also claims that such strict regulations discourage entrepreneurs and hurt consumers. Adobe, Nvidia, and Meta have all abandoned deals as well due to there being no clear path to getting approval from the European Commission. Microsoft was able to acquire Activision Blizzard, however, after making certain concessions.
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