In full transparency, the following is a media release from Sen. Elizabeth Warren’s office. She was elected by voters in the Commonwealth of Massachusetts to serve the state in Washington DC in the US Senate. She is a Democrat. (stock graphic)
WASHINGTON DC – U.S. Senator Elizabeth Warren (D-Mass.) and Representatives Mondaire Jones (D-N.Y.), Katie Porter (D-Calif.), Mark Pocan (D-Wisc.), Pramila Jayapal (D-Wash.), and Jesús “Chuy” García (D-Ill.) sent a letter to the Federal Trade Commission (FTC) calling on the agency to oppose Amazon’s proposed $1.65 billion acquisition of iRobot, raising concerns about Amazon’s anticompetitive practices that put consumers and their privacy at risk.
“I have serious concerns about the Amazon-iRobot deal – dominant companies like Amazon shouldn’t be allowed to just buy their way out of competing,” said Senator Warren. “The FTC should oppose this proposed merger to protect competition, lower consumer prices, and rein in Amazon’s well-documented anticompetitive activities.”
In September, the FTC officially began a review of Amazon’s proposed $1.65 billion acquisition of iRobot, which “dominates” the smart vacuum market with 75% market share by revenue. Amazon had previously attempted to compete with iRobot’s flagship Roomba vacuum with its own products, which received a limited rollout and lackluster responses, and these products were put on indefinite hold in 2020.
“iRobot is a powerful market incumbent, and Amazon, given its vast resources, history of producing smart vacuums… and powerful platform, is an extraordinarily significant ‘potential entrant’ into the market: Amazon’s ability to acquire iRobot would cause substantially less competition,” wrote the lawmakers.
Amazon’s strategy of leveraging massive market share and access to capital to buy or suppress popular products, coined “Cope-Acquire-Kill,” is a long-held pattern for the company:
- In 2017 and 2018, Amazon acquired Blink and Ring, producers of video security doorbells that account for 40% of the video doorbells in the U.S. – and by 2021, Amazon Ring sold as many units as its four closest competitors combined.
- In 2012, Amazon acquired Kiva Systems, an industrial bot builder, stopped selling Kiva devices to other manufacturers, and instead used them exclusively in their warehouse – leveraging its monopoly power to make itself a leader in the warehouse and fulfillment robotics space.
- Amazon’s anticompetitive practices have also included the use of data from third-party sellers on its platform to launch its own competing products, and “exploiting its vast trove of internal data to promote its own merchandise at the expense of other sellers.”
The lawmakers also expressed concerns about Amazon’s data privacy policies and impacts on consumer privacy if it acquires iRobot. Amazon has failed to protect consumers and consumer privacy – its Alexa voice assistant listens and records to consumers without consent, and it partners with over 600 law enforcement agencies through its Ring video doorbells. Since 2017, iRobot has moved into data collection, using mapping technology to improve its products and appeal to Big Tech companies. “Amazon’s acquisition of iRobot would give the company access to the inside of homes through Roomba’s mapping technology, building on the access it bought with the Ring and Blink purchases in 2017 and 2018 and effectively giving Amazon ‘eyes and ears’ inside the home – the stated goal of the company since at least 2017,” continued the lawmakers.
Given Amazon’s pattern of anticompetitive behavior, failure to protect consumers and their privacy, and antitrust and consumer-protection concerns if it acquires iRobot, the lawmakers are calling on the FTC to use its authorities, consistent with Section 7 of the Clayton Act, to oppose the Amazon-iRobot transaction.