CMA clears Amazon's $1.7bn acquisition of iRobot

The Competition and Markets Authority has given the green light for Amazon’s planned $1.7bn acquisition of iRobot, the maker of the Roomba vacuum cleaner.

The regulator said on Friday that it has concluded the deal would not lead to competition concerns in the UK.

In particular, the CMA found that iRobot’s market position in the supply of robot vacuum cleaners in the UK is modest and already faces several significant rivals. On this basis, the CMA considered that the loss of potential competition from Amazon wouldn’t have a substantial impact on market outcomes.

In addition, it found that while Amazon could use its position as a major retailer to disadvantage rival robot vacuum cleaner manufacturers, it would lack the incentive to do so.

"This is because the benefits of such a strategy would be limited, given that the UK market for robot vacuum cleaners is small (and not expected to grow significantly in the future) and of limited strategic importance, and pursuing this strategy would have significant costs for Amazon (including from lost sales commission and reduced advertising revenues)," the CMA explained.

Finally, it argued that acquisition of iRobot would not disadvantage Amazon’s rival ‘smart home’ platforms, mainly because robot vacuum are generally not considered to be an important input to the emerging ‘smart home’ market in the UK.

Colin Raftery, senior director of mergers at the CMA, said: "More people are choosing to use ‘smart’ tech in their homes - whether that’s listening to the radio through a smart speaker, answering the door using a video doorbell, or keeping floors clean with robot vacuum cleaners.

"That’s why it’s important to ensure tech firms that already benefit from powerful positions aren’t able to use those positions to undermine competitors at the expense of UK consumers and businesses.

"Here, after a thorough investigation, we’re satisfied that the deal would have no impact on competition in the UK."