Amazon.com Inc.’s $1.4 billion deal for vacuum cleaner firm iRobot Corp. risks being derailed unless the firms fix a list of competition concerns highlighted by the European Union’s antitrust arm.
The European Commission in Brussels issued a so-called statement of objections on Monday, warning how Amazon’s proposed deal could hurt the market for the manufacturing and supply of robot vacuum cleaners, and allow the ecommerce giant to strengthen its position in the market for online marketplaces and in other data-related services.
The filing — increasingly common in complex merger transactions — called upon the firms to remedy the concerns. Failure to do so could mean that Amazon’s deal for iRobot faces the same fate as Booking Holdings Inc.’s €1.6 billion ($1.7 billion) deal for Sweden’s Etraveli Group, which was blocked by the EU in September. The two firms can request a hearing with regulators to challenge the EU’s warning.
The purchase gives Amazon a household-name in home cleaning gadgets that may give it a leg up over its own designs. More recently, the EU raised concerns over Adobe Inc.’s $20 billion buyout of Figma Inc.
The EU opened an in-depth probe into the deal in July, noting that it could thwart other robot vacuum cleaners and make “it more difficult for rival marketplace providers to match Amazon’s online marketplace services.”
Monday’s move puts the commission at odds once again with Britain’s Competition and Markets Authority, which gave the deal the green light after concluding that iRobot has a modest market power.
