The UK’s Competition and Markets Authority (CMA) has given a green signal to the deal, noting that Amazon is not infringing on any competition concerns.
Earlier today on Friday, 16 June, the UK’s competition regulator gave the green signal Amazon For its planned acquisition of iRobot Corporation – the Roomba vacuum cleaner maker.
The UK’s Competition and Markets Authority (CMA) said they have approved the deal which will not cause any competition concerns in the country. Earlier in April 2023, the CMA launched an investigation into the deal struck by Amazon.com Inc (NASDAQ: AMZN) in August of last 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 considered three potential areas of concern.
- The first is whether Amazon could start selling robot vacuum cleaners if the merger didn’t happen, and if it would, it would significantly reduce competition.
- The second is whether Amazon could use its online store to hurt iRobot’s competitors through a merger.
- The third is whether iRobot vacuum cleaners are important to the “smart home” platform, and whether Amazon could hurt its smart home rivals if the merger goes through.
Speaking on the development, an Amazon spokesperson Said,
“We are pleased with the decision of the UK Competition and Markets Authority and remain committed to supporting regulatory bodies in their work. We expect similar decisions from other regulators soon.”
No competition concerns in CMA-Amazon deal
After conducting due diligence, the CMA concluded that Amazon’s deal to acquire iRobot would not violate any of the regulator’s competition concerns. The CMA found that iRobot does not have a large market share in the UK for robot vacuum cleaners and already faces significant competition. That’s why the arrival of Amazon will not affect the market much.
Even though Amazon is a major retailer, it would have no strong incentive to harm other robot vacuum cleaner manufacturers. The UK market for these cleaners is small and not expected to grow much, so profits will be limited. Additionally, pursuing such a strategy would be costly for Amazon.
The acquisition of iRobot won’t hurt Amazon’s competitors in the “smart home” market. Robot vacuum cleaners and the data they collect are not considered important to the UK smart home market. There are also other vacuum cleaners with similar capabilities that may be part of rival “smart home” offerings.
Colin Raftery, Senior Director of Mergers at CMA, said:
“This is an important milestone, and both companies are continuing to work closely with other relevant regulators in reviewing the merger.”
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Bhushan is passionate about Fintech and has a good grasp of understanding the financial markets. His interest in economics and finance drew his attention to the newly emerging blockchain technology and cryptocurrency markets. He is in the process of continuous learning and keeps motivating himself by sharing his acquired knowledge. In his spare time he reads thriller fiction novels and occasionally explores his culinary skills.
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