The EU is set to launch an antitrust case against Amazon over its proposed $1.7bn acquisition of Roomba-maker iRobot, in the latest signal that big tech groups will receive greater scrutiny over dealmaking.
Regulators in Brussels have sent the $1tn tech giant a series of detailed questions over the proposed transaction, according to two people with direct knowledge of the decision, in a move that indicates that they are gearing up for a formal probe.
While the US Federal Trade Commission is scrutinising the deal over concerns it would increase Amazon’s market power in the home electronics sector, investigators at the European Commission, the bloc’s executive arm, have privacy concerns.
According to those with knowledge of their intentions, antitrust regulators are likely to launch a formal probe over how the Roomba operates, in particular, the autonomous vacuum cleaner’s ability to take pictures as it moves around a home.
“EU officials are trying to determine how important this deal is to Amazon and how it might use it to combine data it already gathers with Alexa [the company’s voice assistant technology] to gain a competitive advantage,” said a person with direct knowledge of the EU’s concerns.
It follows an investigation by MIT Technology Review, published in December, that detailed how a development version of a Roomba robot, being tested by paid volunteers, captured intimate images. Some images subsequently appeared on web forums, the publication reported. IRobot has said it is investigating and suspended its relationship with a service provider used to process the data.
Global regulators are increasingly looking at the data implications of deals, particularly those led by big tech companies including Meta and Apple. Such actions come after many years of light-touch regulation of such acquisitions. Facebook acquired WhatsApp and Instagram with relatively little scrutiny despite those groups holding the personal data of millions of users worldwide.
Amazon is preparing to fight the EU’s concerns by pointing to restrictions built into the Roomba device, arguing that it only has basic sensor mapping that is unlikely to bridge any data privacy, according to two people with knowledge of the upcoming probe.
They said the tech giant would also argue the deal should go ahead because buying iRobot does not give Amazon any particular market advantage over rivals and given how many competing products are available.
People with direct knowledge of the deliberations said it would still take weeks for the EU’s regulators to launch an initial “phase 1” investigation, and the timing could yet slip. They added that if Amazon was unable to appease concerns, regulators would then move towards a more extensive “phase 2” probe.
Some US lawmakers have called on the FTC to oppose the deal. “The FTC should oppose this proposed merger to protect competition, lower consumer prices and rein in Amazon’s well-documented anti-competitive activities,” said Democratic senator Elizabeth Warren soon after the deal was first announced in August last year. The FTC has since requested more information about the transaction.
Amazon and the European Commission declined to comment on a potential probe.
EU set to investigate Amazon’s $1.7bn purchase of Roomba-maker Republished from Source https://www.ft.com/content/b05a1260-ee5a-4ac8-9a34-31cdb8104cf1 via https://www.ft.com/companies/technology?format=rss