On Monday, European regulators stated that the purchase of iRobot by Amazon, a manufacturer of robot vacuums, could potentially have negative effects on competition.

The European Commission, which is responsible for enforcing antitrust laws within the European Union, has notified Amazon of its initial stance on the deal after conducting an investigation since July.

The announcement sparked worries among investors regarding the purchase, causing stocks of iRobot Corp. to drop by over 17% on Monday. The company, known for its round Roomba vacuum, is based in Bedford, Massachusetts.

European regulators have expressed worries that the acquisition could impede iRobot’s competitors from sufficiently competing on Amazon’s marketplace. They argue that this platform is crucial for the sale of robot vacuum cleaners in France, Germany, Italy, and Spain.

If the agreement is finalized, the commission stated that Amazon could be motivated to hinder competitors from offering their goods on its platform or impede their ability to do so.

The commission stated that Amazon has the ability to decrease the prominence of a competitor’s item on its marketplace or restrict access to certain labels, like “Amazon’s choice,” which could draw in more customers. Additionally, it may seek ways to increase the expenses for iRobot’s competitors when advertising and selling their products on its platform.

The commission must reach a final verdict on the deal by Feb. 14. Amazon may offer a response to any objections raised.

An Amazon representative, Alexandra Miller, stated that the company, headquartered in Seattle, is collaborating with the commission and is prioritizing the resolution of its inquiries.

Miller stated that IRobot, a company that experiences strong competition from other suppliers of vacuum cleaners, provides functional and innovative merchandise. He expressed confidence that Amazon has the capability to provide resources for a company like IRobot to advance their innovation and invest in crucial features, ultimately reducing prices for consumers.

Last year, Amazon announced its purchase of iRobot for $1.7 billion. However, due to the vacuum maker accruing new debt, the value of the deal has decreased by 15%.

Organizations focused on preventing monopolies have expressed worries about the agreement, stating that it would expand the e-commerce giant’s control in the smart home industry.

However, the acquisition of iRobot by Amazon was approved by British antitrust regulators in June. The purchase is currently under review by the Federal Trade Commission in the United States.

The stock of Amazon saw a less than 1% increase on Monday.

Source: wral.com