New Delhi

Amazon's ambitious $1.4 billion deal to acquire iRobot, the robot vacuum manufacturer, is facing a potential veto from European Union (EU) antitrust regulators. Sources reveal that the European Commission, concerned about potential market competition restrictions in the robot vacuum sector, warned against the deal.

Advertisment

Amazon, however, chose not to provide remedies to address these concerns, leading to increased scepticism from regulators. The decision on the deal is expected by February 14, with indications pointing toward a blockage of the acquisition.

The European Commission's primary apprehension lies in the possibility of Amazon using its dominance on the online marketplace to suppress iRobot's competitors, particularly in key European markets such as France, Germany, Italy, and Spain. The concerns revolve around potential anti-competitive practices that could emerge, impacting the broader landscape of robot vacuum cleaners. Both the European Commission and Amazon have refrained from commenting on the ongoing developments.

Notably, Amazon's defiance of the European Commission's warnings and its reluctance to provide remedies have fuelled speculations about the deal's viability. The regulator is scheduled to make a decision in mid-February, with mounting indications that it will block the acquisition.

Advertisment

One source suggests that the recently enacted EU tech rules, known as the Digital Markets Act, could potentially address concerns arising from the deal. However, given the untested nature of this legislation and the prolonged enforcement process, regulators are leaning towards an outright rejection of the Amazon-iRobot merger.

In response to the uncertain fate of the deal, iRobot shares experienced a significant downturn, plummeting by 30 per cent in late trade.

(With inputs from Reuters)