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European regulators said on Monday that Amazon’s proposed acquisition Robot vacuum maker iRobot could hurt competition.
The European Commission, the EU’s executive branch and top antitrust enforcer, said it has informed Amazon of its “preliminary view” regarding the deal following an investigation that began in July.
The news heightened investor concerns about the acquisition, sending shares of Bedford, Massachusetts-based iRobot Corp., best known for its spherical-shaped Roomba vacuum, down more than 17% on Monday.
European regulators raised concerns that the purchase could prevent iRobot’s rivals from competing effectively on Amazon’s marketplace, which they said was a significant threat to robot vacuum cleaner sales in France, Germany, Italy and Spain. There is a platform.
If the deal is successful, the Commission said Amazon could be incentivized to prevent competitors from selling their products on its marketplace or make it difficult for them to do so.
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Among other things, it says Amazon may reduce the visibility of a competing product in its marketplace or limit access to certain labels, such as “Amazon’s Choice,” which may attract more buyers. The Commission said it could also find ways for iRobot’s rivals to raise the costs of advertising and selling their products on its platform.
The Commission has until February 14 to take a final decision on the deal. And Amazon may respond to some of the objections raised.
Amazon spokeswoman Alexandra Miller said the Seattle-based company is working with the commission and is focused on resolving its questions.
“iRobot, which faces intense competition from other vacuum cleaner suppliers, offers practical and inventive products,” Miller said. “We believe Amazon can provide a company like iRobot with the resources to accelerate innovation and invest in critical features while keeping prices low for consumers.”
Amazon’s acquisition of iRobot was announced last year for $1.7 billion, but the deal value declined 15% after the vacuum maker a new loan has been made,
Anti-monopoly organizations have expressed concerns about the deal, saying it will increase the e-commerce giant’s dominance in the smart home market.
Amazon stock ended Monday down less than 1%.
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