FTC digs in on Amazon's iRobot deal
The FTC has officially begun a review of Amazon’s $1.7 billion takeover of robot vacuum maker iRobot to decide if the deal violates antitrust law, and the companies are bracing for a potentially lengthy, arduous investigation, according to two people with knowledge of the probe.
The agency's action comes after the companies notified the FTC of their deal just over two weeks ago, the people said.
The FTC had been expected to review the merger, given that it also has underway a wide-ranging monopolization probe of Amazon. But the timing, which has not been previously reported, can be useful for third parties such as investors who could want to voice concerns about the deal to regulators.
The next step would be formally opening an in-depth probe of the iRobot deal, which the people said is expected given the detailed questions from agency officials. Both were granted anonymity to discuss a confidential investigation.
The FTC’s iRobot review is wide-ranging, one of the people said, including both head-to-head competition and whether the deal will illegally boost Amazon’s market share in both the connected device market and the retail market generally. Amazon also sells the Astro, a high-end robot for household tasks like delivering items and providing home security, that has failed to gain traction with consumers. The Astro does not have a vacuum. The FTC is also investigating how the purchase would add to Amazon’s increasing smart device lineup, which also includes Ring security cameras and the Alexa digital assistant.
Among the concerns the FTC is investigating is whether the data generated about a consumer’s home by iRobot’s Roomba vacuum will give it an unfair advantage over a wide variety of other retailers. That concern was voiced by multiple critics of the deal when it was first announced early this month. For example, Amazon could have an advantage with a consumer looking to buy a couch, by using detailed home maps generated by iRobot to suggested particular items.
And the iRobot review comes as the FTC is also pushing further ahead with scrutiny of another deal. On Friday, 1Life Healthcare — which operates the primary care provider One Medical — disclosed that the FTC opened up an in-depth review of its takeover by Amazon. The two deals were announced less than three weeks apart this summer.
One Medical is a membership-based primary care provider, with locations around the U.S. Amazon is shutting down a similar service, a fact that could draw censure from the FTC, which could interpret the move as Amazon choosing to buy a competitor rather than compete with it.
In the One Medical deal the FTC is asking questions about the data Amazon would have access to, querying insurance companies and others about how One Medical’s patient data would potentially give it an advantage over competitors and customers, according to a person with knowledge of that review. That individual was granted anonymity because that information is part of the confidential investigation.
The FTC, One Medical and iRobot did not immediately respond for comment.
Amazon declined to comment on either view. The company did reiterate its past statements about both deals, saying it will employ all necessary safeguards for consumer data, including health care information.
CORRECTION: A previous version of this report described the Amazon Astro incorrectly. It is a robot used for household tasks like delivering items and messages, and for home security.
