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Amazon’s takeover of iRobot faces EU antitrust veto

iRobot Roomba i7 on a wooden floor

The European Union’s antitrust regulators could block Amazon's $1.7 billion acquisition of iRobot, a vacuum cleaner maker.

However, the takeover deal got earlier clearance from the UK's Competition and Markets Authority (CMA). 

The CMA had previously approved the purchase, citing Amazon's "modest" market presence in the UK and significant competition. 

However, there are concerns about potential anti-competitive practices if Amazon gains control of iRobot.

It is regarding preferential treatment on Amazon's e-commerce platform. 

The European Commission, the EU's competition watchdog, initiated an investigation in July.

The agency will make a decision by Wednesday, February 14, contingent on consensus among the commission's 27 top political leaders.

News of the possible rejection immediately impacted iRobot's shares, which plummeted by 40 percent during after-hours trading. 

The e-commerce giant planned to buy iRobot in August 2022 at $1. billion (£1.4 billion).

Amazon sought to expand its footprint in the smart home appliance market through acquisition.

However, regulatory worries focus on the potential negative impact on competition among vacuum manufacturers.

Critics, including tech lobbying group Computer and Communications Industry Association, argue blocking the deal could limit consumer options and reduce competition in the home robotics sector

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Matt Schruers, President of the association, said: “If the objective is to have more competition in the home robotics sector, this makes no sense.”

"Blocking this deal may well leave consumers with fewer options, and regulators cannot sweep that fact under the rug."

The rejection represents a big blow for Amazon, which aims to address challenges and sales declines faced by iRobot, renowned for its Roomba cleaner models that typically sell for around £1648 in the UK. 

Amazon has refrained from providing immediate comments on the anticipated decision by the EU competition watchdog.

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